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|A referendum on whether Britain remains part of the European Union is the greatest uncertainty facing the UK house market this year, says a leading property group.
Cluttons anticipates that house price growth will slow this year, largely due to persistent EU Referendum uncertainty. The company also point to the ‘cocktail’ of macro and domestic economic risks, which range from economic malaise in China, weak oil prices and a strong US dollar, all of which are weighing on global sentiment.
|Faisal Durrani, Cluttons head of research, commented: “The internal political jostling on agreeing a 2016, or 2017 date for the in-out vote is certainly not helpful for business confidence and consumer sentiment.
Further speculation on the timing of a referendum is likely to be detrimental to sterling, which in turn affects the value of residential assets.”
|But while Cluttons anticipates that the housing market will slow during 2016, it still predicts that the market will be starved of stock during the year, which will help marginally increase house prices.
Durrani continued: “With the unemployment rate sitting at a record low of 5.1%, the lowest level since 2006, coupled with continued positive wage growth, domestic housing demand is likely to continue in the near term. If anything, we are expecting net demand to gather pace over the medium term. We must remember that domestic demand is largely centred on secondary, period stock, which remains in short supply and is an irreversible issue.
“Slipping mortgage multipliers, no doubt partially fuelled by a fear of liquidity shortage with the falling value of the sterling, is the most immediate concern for domestic buyers along with the looming interest rate increase. That said, we anticipate any base rate rise to occur only once the in-out EU vote has been completed.”