Confidence in the UK property market tumbled in the aftermath of the Brexit vote, according to new research from Knight Frank.
Confidence in the Property Market Tumbles Following Brexit
The consultancy’s House Price Sentiment Index (HPSI), which measures what households think will happen to the value of their property over the next year, dropped to 48.3 in July, from 59.7 in June.
Although 11.2% of the 1,500 households surveyed said that the value of their home had risen over the past month, 14.6% reported that prices had fallen.
This is the first time that the HPSI has dropped below 50 – the reading that points to no change in prices – for the first time since February 2013.
Households in all UK regions, except the South East and the East of England, said that the value of their home had fallen in July, with the greatest loss of confidence coming from London.
The survey was taken between 14th-18th July, to provide insight into the post-Brexit property market.
Although households were negative about the past month, homeowners were more confident in the future, with price rises expected for the next 12 months.
This aspect of the HPSI dropped to 50.3 in July, from 67.7 in June. This is the lowest reading recorded since October 2012, suggesting that households expect more modest rises in property values than the last few years. However, although the index has fallen, the expectation is still for positive, albeit modest, growth over the next year.
The Head of UK Residential Research at Knight Frank, Grainne Gilmore, comments: “The impact of uncertainty in the wake of the Brexit vote is clear from the HPSI index reading for July, especially in light of the relative strength of sentiment in the run-up to the vote. Although there has been a marked drop in the index, the readings are hovering around the no-change mark, similar to levels in 2012/13.
“As well as geographical variations, there are wide differences in expectations depending on age groups, with those aged over 55 expecting the value of their home to dip over the next 12 months, as well as those aged 18-24. All other age groups expect prices to rise modestly.”
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