The vote to leave the European Union has made homebuyers and homeowners more cautious, according to a new report by Unbiased.
Although a majority consider that the vote has had no effect, one in five people selling their homes felt under pressure to sell fast, while 15% of respondents overall believe that property prices will fall (just 7% believe the opposite).
The Unbiased report, Buying a Home in Brexit Britain, highlights the already difficult position of first-time buyers in the UK, and what effect the referendum result may have had on this. Of the UK adults who do not currently own their home, only one in 10 had any plans to buy a home in the next 12 months.
The report also finds that these potential first-time buyers are slightly outnumbered by those planning to upsize in the coming year – who are themselves outnumbered by those planning to downsize. This imbalance has the potential to create a bottleneck in the market, driving prices down, Unbiased said.
Meanwhile, 84% of homeowners planning to stay in their current homes. Extensions have become more popular than moving, with 11% of homeowners planning to enlarge their properties, versus 8% who plan to upsize.
Record low interest rates are driving a rush to remortgage. The report finds that 21% of homeowners are planning to secure a new mortgage, but even more homeowners apparently would if they could – 16% are bound by the terms of their current mortgage, while 13% are unsure if they can remortgage.
36% of respondents live in rented accommodation, with houses outnumbering flats. Only 16% of those currently renting have any plans to buy in the next year.
Karen Barrett, chief executive of Unbiased, said: “First-time buyers have had it tough for some time. Many will have welcomed predictions that the Brexit vote would depress growth in house prices – but it may not be as simple as that. There are signs of increased caution higher up the housing ladder, which may slow the market’s movement even as it (perhaps) lowers prices.
“Markets tend to flow best during moods of optimism and certainty, both of which may be lacking at this time. When in doubt, homeowners tend to stay put and extend their properties instead – which is no use to the first-time buyer.
“The most obvious immediate effect of the Brexit vote has been the slashing of interest rates to a new record low. Many are seeing the opportunity to remortgage – but it’s significant that many more either cannot do so or don’t know if they can. A large percentage will therefore be stuck on higher mortgage rates, unable to take advantage of the cut. It’s likely that many people in this position could benefit from talking to an independent mortgage adviser, who can clarify their options and perhaps find them a better deal.”