Uncertainty about the effect of Brexit on the housing market is putting off first-time buyers claims a new report.
Financial services provider One Family says would-be home owners are postponing their purchase in the belief that house prices will drop following the UK’s departure from the European Union at the end of March.
Price growth slowing
The firm say at least 136,000 buyers are holding off taking the plunge to wait and see what happens after the dust settles on our separation from the EU.
They believe Brexit is already affecting house prices with the Halifax reporting price growth slowing to its lowest rate in six years.
Spokesman Nici Audhlam-Gardiner said: “At times of uncertainty it is always hard to know what to do, and many would-be homeowners would benefit from the reassurance of speaking to a financial adviser to help them understand the options available to them.
“While any market fluctuation as a result of Brexit could give first-time buyers a golden opportunity to get on the housing ladder, it could just as easily make it harder.”
Industry expert David Hollingworth took a different view saying first-time buyer demand had ‘held up surprisingly well’.
He said: “The indices continue to show a varied regional picture when it comes to house prices so there’s no guarantee that first-time buyers will see big drops in prices and the lack of available property is likely to support prices.
“Nonetheless, first-time buyers are likely to feel less pressure to move quickly and will feel more confident that they can continue to build their deposit in a market that many expect will generally be flat.”
A statement from Halifax said that the requirement for ‘significant deposits’ is also acting as a restraint on people who want to buy.
Cost remains a key issue for young potential buyers as overall house prices rose by 1.13% over the course of 2018 with a typical home now costing £229,729.
Managing director Russell Galley predicted house prices would rise by between 2% and 4% in 2019.
He said: “This is slightly stronger than 2018, but still fairly subdued by modern comparisons.
However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.”