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Brexit Fears Move From U.K. Commercial Property to Housing

15 July 2016

As the consequences of the U.K. vote to leave the European Union continue to unfold, data released on Thursday show that fears are spreading from the commercial property sector to the housing sector. The Royal Institution of Chartered Surveyors’ (RICS) monthly survey showing sentiment in the housing market souring and buyer enquiries down for the third straight month in June. The headline national net balance for buyer enquiries, which indicates new buyer interest, was the lowest since the height of the global financial crisis in mid-2008. Strong growth last year and early this year had pushed prices to new record highs in London and the south east of England before the referendum. These are the most affected regions now, with the southern parts of England seeing the sharpest contraction in demand: 58% more surveyors in London saw a decline, rather than a rise in buyer interest. “Anecdotal evidence suggests that uncertainty relating to the EU referendum result was the primary driver of the slump although the higher stamp duty rates at the upper end of the market also continue to weigh on demand,” the RICS said in its monthly report. The previous government raised stamp duty for the most expensive properties and introduced an additional tax for buyers of second homes in an attempt to cool down rapid price increases that were getting out of control. It seems that Brexit was the needle that has pricked the bubble – the question now is how fast it will deflate and whether the government can re-inflate it. Source

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