Homeowners across the U.K. feel that the value of their property has fallen over the course of this month, according to an index measuring household sentiment for the first time since the historic Brexit vote in June.
The House Price Sentiment Index (HPSI) released Friday by real estate consultancy Knight Frank and data firm IHS Markit stands at 48.3, with 14.6% of households surveyed saying they perceived that prices have fallen. This is the first time the index stands below 50—a reading indicating no change in prices—since February 2013.
“The impact of uncertainty in the wake of the Brexit vote is clear, especially in light of the relative strength of sentiment in the run-up to the vote,” said Gráinne Gilmore, head of U.K. residential research at Knight Frank.
In the three months prior to July, the average reading was 60.3, according to Knight Frank. This month’s reading represents a decrease from 59.7 in June and is significantly below its peak of 63.2 recorded in May 2014.
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A total of 1,500 households across all price bands were surveyed between July 14 and 18.
The gloomiest sentiment came out of London, where homeowners surveyed moved the index from 69.6 in June to 49.5 in July. This is the first time that households in the U.K. capital perceived that prices had fallen since October 2012.
Looking forward, however, households are less pessimistic.
The future HPSI, which measures sentiment for home prices in the year to come, fell to 50.3—slightly above the “no change” level—in July, from 67.7 in June. The June survey was conducted before the Brexit vote. Again, the biggest change in sentiment belonged to Londoners, whose optimism around future property values generated a reading of 56.3, higher than any other region in the U.K.
Still, the nationwide reading is the lowest since October 2012, indicating that households expect only modest rises in the value of their homes. Before the referendum, 43% of U.K. households expected property values to rise in the next 12 months while 8% said values would fall. Conversely, today, 26% believe their homes will gain value over the same period, with 23% predicting that values will decline.
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“While it is too early to evaluate the full impact of the EU referendum on the U.K. property market, it is already clear that heightened uncertainty has cast a shadow over household sentiment,” said Tim Moore, senior economist at IHS Markit.
Moore also warned that price expectations could remain highly sensitive to economic and political developments over the next months.
In a separate market update released by Knight Frank earlier this week, to recent political events, such as the appointment of a new prime minister, were seen as adding confidence in the market. However, a key indicator of the U.K. economy, released Friday, cast a shadow on that outlook. IHS Markit separately reported that its Purchasing Managers Index, a measure of private-sector activity, fell from 52.4 in June to 47.7 in July, its lowest level since early 2009. The data, which could mean that the British economy contracted this month, caused the pound to fall against the U.S. dollar.