Confidence is returning to the UK housing market after a slight dip in the run-up to the EU Referendum, the latest Property Tracker by the Building Societies Association (BSA) has found.
The Tracker found that a greater proportion of people (12%) are more likely to purchase property now than they were at the beginning of the year, compared to just 4% who say they are less likely to do so.
According to the Property Tracker, the Referendum result has so far had less influence on buyer behaviour than was initially anticipated. Around 44% of consumers who are more likely to buy a property say a change in personal circumstances has put them in a better position to do so, compared to a year ago.
The results show that a change in personal circumstances is also a key reason consumers are less likely to buy property than they were this time last year, cited by 20%. The same proportion cited the Referendum result as a reason for holding off. A further 19% said they were less likely to buy because they have already bought a home this year.
“Following the decision on 24th June, there were numerous media reports of buyers pulling out of property purchases, but the fundamentals of the housing market remain strong, and there has not been a significant reduction in housing demand,” commented Paul Broadhead, Head of Mortgage Policy at the BSA. “Mortgage interest rates are at an all-time low and UK building societies continue to offer market leading products.”
“Looking ahead, housing market sentiment will ultimately be determined by the health of the UK economy, and more specifically wage growth and job security,” he added. “While the UK unemployment rate remains under 5%, the vote to leave the EU has had some impact on business confidence and investment.”
“To support the housing market it’s vital that the Government continues to increase housing supply and ensure that we build enough homes to house the UK’s current population,” he concluded.
The latest figures from the Council of Mortgage Lenders (CML) also paint an increasingly positive picture of the housing market.
It estimates that gross mortgage lending reached £22.5 billion in August, which is 7% higher than July’s lending total of £21.1 billion. In addition to the month-on-month rise, lending rose 15% year-on-year, from £19.5 billion in August 2015. This is the highest August figure since 2007 when gross lending reached £33.6 billion.
“Widely voiced fears in recent months about the housing market have proved to be wide of the mark,” explained CML senior economist Mohammad Jamei. “Prospects for house purchase activity post-referendum look slightly subdued, when compared to late 2015 and early 2016. However, sentiment in the market recovered in August. This is reflected in stronger-than-expected transaction figures, and in our gross lending estimate.”
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