Savills, which in the past has been restrained in its critique of Brexit’s effect on the housing market, now says that when it comes to the value properties the EU issue has become “the single biggest constraint on the market.”
Lucian Cook, the agency’s respected head of residential research, says in a new research document from the firm: “Brexit remains the biggest single constraint on the market, contributing to a lack of urgency among buyers, who will only commit when they perceive real value. A widening of the gap between buyers and sellers in terms of price expectations is also dictating the pace of the market, making it more difficult to put chains together.”
Savills points to a build-up of potential buyers, watching the market but adopting a ‘wait and see approach’ until there is greater clarity around Brexit.
The firm registered 16 per cent more buyers, with viewings up 20 per cent in the first three months of 2019 than in the same period last year.
“While higher rates of stamp duty contribute to buyer caution, it is far less an issue than Brexit, having largely been priced into values before the referendum” said Cook.
“Anything that gives greater certainty is likely to release the brakes on turnover. But regardless, the market is expected to remain price sensitive over the remainder of the year.”
Cook’s remarks relate chiefly to the market for homes priced over £2m where average values are now down 6.3 per cent compared to their pre referendum level, with prices for large country houses still on average a whopping 21 per cent below their 2007 peak.
“Even in the high value hotspots of the Home Counties and Cotswolds, values remain 8.6 per cent down, having slipped a further 1.1 per cent over the past 12 months” says a Savills report.
But Cook says that across the board “there is a market for well-priced stock from buyers sensing an opportunity to trade in a less competitive environment who are prepared to take a long term view of the market.”