Forty per cent of business owners and small businesses expect buyers and sellers to hold back until there is greater clarity on the impact of the referendum
The UK’s business owners and small businesses are anticipating a slowdown in the housing market in the wake of the EU referendum decision, according to the latest Owner Managed Business (OMB) Barometer published by Bank of Cyprus UK.
With the recent referendum outcome, the residential sector is facing an uncertain future, says the bank. Many buyers and sellers are sitting on the fence by withholding decisions regarding the sale or purchase of properties. Notwithstanding interest rates being at historic lows and the cost of mortgages declining, two-fifths (40%) of the UK’s business owners and small businesses expect buyers and sellers of houses to hold back until there is greater clarity on the impact of the referendum.
Nearly a third of business owners and small businesses (30%) expect house prices to fall by 5% over the next year, and more than a tenth (11%) think prices will fall by 10%.
The UK’s business owners and small businesses have a mixed view on the UK’s buy-to-let market. Despite the former Chancellor’s changes to stamp duty in March nearly a quarter (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.
Kypros Kyprianou, managing director at Bank of Cyprus UK, said: “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.
“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.
“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.”