With the announcement that the supply of homes in the UK market fell at its sharpest rate to date with buyer demand hitting an eight year low following the ‘Brexit’ vote, it appears that a fall in house prices is being anticipated. The RICS expect prices to fall in the next few months.
While this may be attractive to potential first time buyers, it will most certainly be bad news for property investors and existing home owners.
The fall in supply to the market is down to potential sellers uncertain if now is the right time to sell following the recent referendum result. The dramatic ‘Brexit’ result, combined simultaneous with political uncertainty and instability with leadership changes in both leading political parties, has left the housing market in somewhat of a turmoil.
The Government has moved quickly to try and stabilise matters with a prompt election of a replacement Prime Minister, but the rocky road ahead is an unknown one for both politicians and investors alike.
The housing market has always found its own “norm” within a matter of months, but the fear is that an inevitable fall in house prices will in turn reduce the supply of properties for sale as potential sellers elect to stay put and wait to see what happens.
This is often the case when there are dramatic changes in either economic policy, Stamp Duty or other taxes, or changes in interest rates, but this current position is a little unusual as we have a drop in interest rates combined with uncertainty in the financial market place and predictions of an inevitable fall in house prices.