Some 40% of business owners and small businesses in the UK expect buyers and sellers of houses to hold back until there is greater clarity on the impact of Brexit.
Of these, 30% expect house prices to fall by 5% over the next year and 11% believe prices will fall by 10% over the next 12 months, according to the latest Owner Managed Business (OMB) Barometer published by Bank of Cyprus UK.
The report suggests that due to the recent referendum outcome, the residential sector is facing an uncertain future. Many buyers and sellers are sitting on the fence by withholding decisions regarding the sale or purchase of properties despite interest rates being at historic lows and the cost of mortgages declining.
However, business owners and small businesses have a mixed view on the buy to let market. Despite the former Chancellor’s changes to stamp duty in April some 22% of these businesses are expecting buy to let activity to weaken, 19% still see buy to let as a good investment, whilst 11% do not.
‘Since the decision to leave the EU the housing market has experienced a degree of turbulence, due to uncertainty. It is unsurprising that many buyers and sellers are waiting for further clarity on the macroeconomic climate,’ said Kypros Kyprianou, managing director of Bank of Cyprus UK.
‘However, in the wake of the referendum vote and recent buy to let changes, there remains positive signs surrounding the buy to let market, with our experience showing that businesses owners are still finding this a rewarding investment,’ he explained.
‘That said, British housing still faces serious policy questions relating to buy to let and the economy is still vulnerable to the negotiations regarding the EU. These must be addressed in the immediate term, in order to meet the property needs of our economy,’ he added.