Uncertainty will be a key characteristic of the housing market for “the next few years” warns Countrywide - and not just because of Brexit.
In a prediction on the housing market issued through the company’s upmarket brand Hamptons International, the agency group warns of a series of threats.
It says growth is sluggish, interest rates are on the horizon and “uncertainty still looms large”. As a result it predicts house prices in the mainstream market will fall next year by 0.5 per cent across the UK as a whole and 2.0 per cent in London.
“Uncertainty regarding the future of the UK’s relationship with the EU continues to weigh on confidence. In particular, the lack of clarity around the UK’s future trading relationship is having wider implications for the economy, not just the housing market” warns the agency.
It says that in the longer term the effect of Brexit should begin to drop out of the picture, but an enduring problem will remain affordability - or, more precisely, the lack of it.
“House prices over the last decade have risen faster than incomes which means that affordability remains a barrier not just for first-time buyers, but for general movers too. These affordability pressures combined with the added transaction cost of stamp duty is weighing on activity and has been for some time - Brexit has just been the final straw” warns the agency.