A vote at the EU referendum to leave could have a bigger influence on transactions than prices, Hometrack has claimed.
The technology provider looked back at big economic and political events that have hit the property market such as the dot com bubble and Iraq War, and claimed a Brexit could see housing transactions fall by 5% to 10%, particularly in London where in the past sales volumes have fallen by up to 15% during tough times.
Meanwhile a vote to remain would deliver a boost to confidence and benefit large regional cities such as Manchester, Leeds and Birmingham.
It comes as Hometrack’s latest UK Cities House Price Index found city level house price growth is running at 10.4% compared to 6.6% a year ago when growth slowed in the face of uncertainty over the General Election.
Cambridge experienced the biggest year-on-year growth at 15.8% with average prices now at £411,900, while London saw prices go up 14.4% to £466,000.
Aberdeen was the only city in the index to experience a fall, dropping 6.1% to £183,400.
Richard Donnell, insight director at Hometrack, said: “Our analysis of how the market has responded to external factors over the last 20 years suggests that a vote to leave on June 23 could result in a 5% to 10% fall in housing turnover, with London bearing the brunt.
“After a period of strong house price inflation over the last five years, the London market faces greater headwinds irrespective of the referendum vote.
“Turnover fell 7% last year on the back of affordability constraints and weaker overseas demand. Tax changes for investors will reduce demand and we expect price growth to slow in the near future even if sterling were to weaken and improve the relative value of central London property.”
He said a vote to remain will have the greatest upside for house prices and transactions in regional cities where the recovery has been more short-lived and affordability less stretched than in southern cities, adding: “The boost to confidence from a vote to remain, coupled with low mortgage rates, would most likely benefit cities such as Manchester, Leeds and Birmingham as housing demand and price growth seems set to sustain itself.”
There’s that word again ‘could’. Enough with the predictions already. Do we really want to sell a few more houses while handing over our democracy. Nope, thought not.
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Do we really want to spin the wheel and see if we can turn our slow recovery back into recession for another two years. Nope thought not either.
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If you’re going to make a point at least answer mine about democracy then I’ll listen to you.
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Do you know PP I love it when people come on and spout about democracy like its a fixed tangent. You are only free to do what you want until such time you need something from someone else.
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You’d give more power to THIS government? Interesting.
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Twaddle. So people will stop buying houses ………. err an ever growing host population and shortage of housing. Just utter tosh and just goes to show how the propaganda wheels are turning to get their vote …… scare everyone and this appears to be the increasing tactic for the undecided.
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I am worried about transaction levels more than anything else. Prices go up and down, but it’s all relative so in the end who cares?
I work in the south-east and fee levels have become a nightmare – one of my competitors is dropping leaflets at £2,000 inclusive of VAT and solicitor’s fees. I make that about £1,200 clear per transaction with an average sale price of around about £240,000. That’s 0.5% plus VAT.
At those levels you need to be doing 200 transactions a year to pay the bills (and make a normal sensible profit) with a 4 person office.
The area I work in as a whole did 509 transactions last year and there are a total of 6 estate agents.
My average fee is just above 1% but the struggle is horrendous – I really need to have an average fee of about 1.5%.
I do actually have several proper USPs like HD Video Walkthroughs which nobody else is doing for miles and miles around.
But the owners don’t care – it is always max asking price and min fee. ALWAYS (please don’t telll me otherwise because you’ll either be one of those very lucky few or lying).
Every now and again I get a vendor prepared to listen, but 99 times out of 100 the reason they go with a competitor is that they said £10k more (they were more confident about the price or some such rubbish) and a cheaper fee (they did a fixed fee that beat yours or equivalent).
We are actually killing ourselves here ladies and gents, it’s a bloodbath.
I want 5-10 years of stability – plenty of people moving, prices going up by the rate of inflation plus a little bit.
I remember when the agency fee was one of the most expensive elements of moving home.
Now we are cut price, solicitors are much cheaper, surveys cost the same or a bit more and the taxes that people pay are unbelievable.
It’s no wonder people are nervous about it all.
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