Member Article

House price slump before EU vote

Property values in England & Wales have fallen by 0.4% month-on-month in May in the run up to the EU referendum accoridng to the latest house price report from Your Move. There have also been the lowest homes sales figures for May since 2011.

However, Slough is bucking the trend, with house prices soaring 23% year-on-year. The price of a terraced house in slough is now £63,000 more than it was a year ago.

Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “The housing market is holding its breath ahead of the EU referendum and after a rapid sprint at the start of the year. This 0.4% dip in average house prices in England & Wales since April will be a welcome respite for those hoping to get their first foot on the ladder. May’s correction in property values also follows on from a surge in activity earlier in the year, when second-home buyers and landlords brought forward their purchases to avoid the stamp duty surcharge. That tax hike and the Government’s anti-landlord policies are weighing down the market, but the main factor is short-term confidence ahead of the 23rd June referendum.

“The year-on-year growth in house prices has also slowed, decelerating to 6.8% in May, from 7.7% in April. With the Chancellor predicting that a Brexit from the EU would reduce property values by at least 10%, many buyers are holding off until after the uncertainly surrounding the referendum has been resolved.

“With so much uncertainty in the UK economy, home sales have been subdued. While the total number of property sales did increase from the previous month, this month has seen the fewest May property sales since 2011, when the UK was still recovering from the recession. This uncertainty surrounding the EU referendum will not be resolved until 23rd June at the earliest. However, home sales for the first five months of the year are still 3% higher than the same period in 2015, due to the investment from landlords earlier in the year. This suggest that over the long-run, landlords won’t be put off by the reduction in mortgage tax relief, as many believe the sector will still be profitable despite the Government’s attempts to drive them out of the market.

“However, not all parts of the market are struggling. There is cause for David Brent to celebrate, as house prise in Slough have surged by 23% year-on-year – more than any other area. The price of a terraced house in slough is now £63,000 more than it was a year ago. Property values in Slough have been boosted by the new Crossrail development, with a new terminus coming into operation in late 2018. The increase in tech jobs in the town has also helped to lift prices, with O2, Nintendo, BlackBerry and McAfee all located along what has been recently branded the “Silicon Alley”. As the fastest growing area in the UK, according to the Centre for Cities, with the number of businesses in the town rising by 29% over the last five years, uncertainty in other parts of England & Wales have not hindered growth in Slough.”

Click here to read the full Your Move house price report.

This was posted in Bdaily's Members' News section by Property Editor .