Consumer confidence in UK house price growth has fallen sharply following the UK’s decision to leave the European Union, with almost a quarter of people surveyed now expecting property values where they live to fall over the next 12 months, a survey has revealed.
The study, from ING, found that confidence had already been weakening prior to the EU referendum, but signs of slowing activity have intensified and sentiment has weakened since the EU vote.
A survey of 1,000 people in the weeks leading up to June’s referendum vote revealed that 57% expected home prices to increase in the next 12 months where they live and 6% predicted prices would fall.
However, a second survey of 1,000 people carried out in August, after the EU vote, found a major change in expectations, with 46% of people forecasting that residential property prices would rise in the next 12 months - the lowest proportion since the survey was first conducted in 2012 – while 22% predicted that there would be a decline in property values.
Previous research carried out for ING in the summer of 2015 found house price confidence had been much higher, with 70% of people at that time forecasting the house prices would increase where they lived in the year ahead.
The latest house price data released by Nationwide Building Society last week revealed that the average price of a home in the UK continued to increase in August, reaching a new record high of £206,145 on average, largely due to a tight supply of homes available for sale.
In addition to carrying out surveys of people in the UK, ING also asked people in 14 other countries in June about their house price expectations.
Across the European countries surveyed in June, 56% of consumers predicted house prices would increase where they live in the next 12 months. This figure was unchanged from the European average a year earlier.