The outcome of the Brexit vote last month will continue to cast a shadow over the U.K. residential market in the months to come, according to local real estate agents responding to a survey.
In a post-referendum monthly sentiment survey by the Royal Institution of Chartered Surveyors (RICS), 58% more respondents in London said they expected a decline rather than a rise in first-time buyers’ interest, which is currently at the lowest level nationwide since mid-2008, according to RICS. A total of 326 agents throughout the U.K. responded to the June poll.
The slump was attributed primarily to uncertainty relating to the Brexit vote, although the survey identified new higher tax rates on expensive properties as another factor.
“The general mood of uncertainty has gripped the top end of the market since stamp duty increases were introduced, and this will continue until lower interest rates are introduced,” said John J. King of property agency Andrew Scott Robertson, who took part in the survey.
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Additionally, 45% more agents surveyed reported fewer properties hitting the market in June than saw an increase, and 35% said there were fewer transactions compared with the previous month. This represents the third consecutive monthly fall in activity.
Looking forward, sales will continue to decrease over the next three months amid ongoing uncertainty, 26% of respondents said. And the outlook doesn’t get better further into the future: 12% more respondents expected transactions to fall than predicted a rise over the year to come.
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“Demand has been subdued pre- and post-Brexit, although buyers are still about, albeit in smaller numbers,” said James Gubbins of Dauntons Estate Agents, a survey responder.
Along with supply and sales, erosion in buyer confidence is also slowing price growth. While at the start of the year around half of agents surveyed saw higher home prices, last month only 16% experienced an increase. In London, 39% of respondents said they expect prices to slow down over the next 12 months.