Housing market bounces back following EU vote dip

CONFIDENCE is starting to recover following the immediate reaction to the EU Referendum, as Yorkshire and the Humber’s residential market experienced a slight upturn in August.

According to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey, there was a pick-up in confidence following the drop in activity and price expectations in the wake of the EU vote.  

Both prices and sales are expected to rise over both the three and twelve month horizons as activity in the market stabilises and more buyers and vendors return.

During August, 21% more agents in Yorkshire and Humber reported an increase in buyer enquiries (up from 18% in July), while 23% also reported an increase in prices (up from 9% in July), with 12% of respondents expecting prices to rise further – albeit modestly – over the coming three months.

This slightly stronger picture is also reflected in price expectations for the coming year, with modest increases anticipated in most parts of the country including Yorkshire and Humber.

A key factor in supporting the rising prices is the continued shortage of stock for sale in Yorkshire and Humber.  This looks set to continue as new instructions (homes coming on to the market) declined once more during August.   As a result, stock on estate agents books slipped, with many reporting record low volumes of stock.

The shortage of housing stock in the region has seen sales recently decline month on month – particularly in the aftermath of the referendum – however sales volumes stabilised during August, and 25% of agents in Yorkshire and Humber expect sales to rise over the coming three months (up from 6% back in July).

Many are also confident the sales market will become more active over the next 12 months as more vendors return to the market.

Simon Rubinsohn, RICS chief economist, said: “There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum. Sales expectations are beginning to edge upwards once again, and it’s likely the swift response from the Bank of England, both in terms of the lowering of the capital buffer and the cut in interest rates, has played a role in helping to support confidence.

“The more assured mood is also reflected in some of the longer term RICS indicators although this in itself could serve to re-ignite ongoing concerns surrounding affordability, with five year projections for both prices and rents in the latest survey back to their highest level since May.”