House prices slump before EU referendum
- Property values dip 0.4% in May – steepest fall since November 2011 as the housing market holds its breath
- London’s house prices fall by 0.3% (£1,769) month-on-month due to uncertainty ahead of upcoming EU referendum
Adrian Gill, director of Your Move estate agents, comments: “The housing market is holding its breath ahead of the EU referendum and after a rapid sprint at the start of the year. This 0.4% dip in average house prices in England & Wales since April will be a welcome respite for those hoping to get their first foot on the ladder. May’s correction in property values also follows on from a surge in activity earlier in the year, when second-home buyers and landlords brought forward their purchases to avoid the stamp duty surcharge. That tax hike and the Government’s anti-landlord policies are weighing down the market, but the main factor is short-term confidence ahead of the 23rd June referendum.
“In London, house prices have slipped from last month’s record high, falling 0.3% (£1,769) month-on-month. This has pushed average property values in the capital back under the £600,000 mark, with the value of a typical home in the city falling to £598,421. However, this decline in property values has not spread across the entire capital. While house prices in the most expensive eleven boroughs have declined by an average of £4,000 (0.5%) from the previous month, values in the cheapest eleven boroughs continue to rise, jumping £3,000 (0.8%) month-on-month. But despite maintaining property values well above the rest of the UK, the demand for homes in London continues to grow. In the three months between February and April, sales of homes in London increased by 15%, compared to the same period last year. The majority of this upswing in sales came from flats. As landlords often prefer to provide flats to rent, these properties were a popular choice before the stamp duty surcharge came into force in April.”
Source: LSL/Acadata England & Wales House Price Index, May 2016