UK housing market slump continues due to Brexit uncertainty and stamp duty increases

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Andrew Feinberg

White House Correspondent

The national housing market remains in the doldrums, weighed down by Brexit-related uncertainty and stamp duty increases, according to the latest report from surveyors.

The August survey snapshot from the Royal Institution of Chartered Surveyors (RICS) shows a slight increase in the balance of surveyors expecting price increases over the next month from +1 per cent to +6 per cent.

But the reading for London is well in negative territory and hit its weakest level since 2008.

The balance also fell further into negative territory in the South East of England.

There was a positive balance for Northern Ireland, the North West, Scotland and the South West.

The national three-month price expectation balance remained slightly negative, with London and the South East again deep in negative territory.

“Brexit uncertainties [are] not helping [the] market, also stamp duty levels not helping,” said Robert Ikin of surveyors Wright Marshall in Cheshire.

The most recent house prices report from the Office for National Statistics estimated annual house price growth of 5.1 per cent in July, unchanged from June, though down from a rate of 8.2 per cent at the time of the June 2016 Brexit referendum.

The Halifax index showed monthly growth of 2.6 per cent in August, up from 2.1 per cent in July.

However, the Nationwide’s index reported growth slowing from 2.9 per cent in July to 2.1 per cent in August.

Before last year’s referendum the Treasury projected that house prices in 2018 could be 10 to 18 per cent lower than otherwise in the event of a Leave vote.

At the 2015 Autumn Statement, the previous Chancellor, George Osborne, introduced a three percentage point stamp duty surcharge on second homes and residential properties purchased by buy-to-let investors, which took affect in April 2016.