Brexit blamed for region’s subdued housing market

The West Midlands housing market ended 2018 on a weak note with uncertainty still lingering alongside continuing lack of stock and affordability issues.

The region’s sales volumes dwindled in December, as fewer buyers and sellers entered the market, according to the latest RICS Residential Market Survey.

Looking to the next three months, sales expectations for the West Midlands also remain negative, with the headline net balance of -35% representing the poorest reading since the series was formed in 1999.

The twelve-month outlook is a little more upbeat, suggesting that some of the near term pessimism is linked to the lack of clarity around what form of departure the UK will make from the EU in March.

In terms of prices, the headline indicator slipped slightly in December, falling to +11% from +20% in November. In the near term, respondents anticipate prices to fall further, and the twelve-month outlook suggest prices will remain broadly flat.

Domestic issues related to the lack of supply and affordability continue to affect buyer and seller confidence in the regional market. Interest from would-be buyers remains in negative territory in December (a net balance of -13%) and the number of new properties being listed for sale continues to fall. Given the cautious nature of would-be buyers and potential sellers, it is little surprise that stock levels on estate agents books are at record lows in the region, with an average of just 27 properties per branch.

Simon Rubinsohn, RICS chief economist, said: “It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued. This is also very clearly reflected in a worsening trend in near term sales expectations. Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts, but that moment feels a way off for many respondents to the survey.

“Meanwhile it is hard to see developers stepping up the supply pipeline in this environment. Getting to the government’s 300,000 building target was never going to be easy but pushing up to anywhere near this figure will require significantly greater input from other delivery channels including local authorities taking advantage of their new-found freedom.”

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