UK house price growth slowed in May as uncertainty surrounding the forthcoming EU referendum hit the market, new figures show.
According to estate agency Haart, UK house price growth slowed in May to 0.8%, down from the 1% increase reported in April.
London house prices saw a decline of 0.2% on the month and prices are up just 5.1% for the year, compared to the 7% annual growth reported the previous month.
Paul Smith, CEO of Haart, said: “The upcoming EU referendum is causing high levels of short-term uncertainty in the property market, making both buyers and sellers nervous, resulting in a fall in activity.
“Whether we remain in the EU or not, the UK, particularly London will not falter as a safe haven for investment. It is the uncertainty around our status in the EU that is causing the market to stagnate, once we know the outcome, regardless of what it is, the property market will become reinvigorated. In the long term, house prices will bounce back once more as the age-old problem of a disparity between the amount of stock available and the number of buyers competing rears its head.”
While buyers are being more cautious in the face of the impending EU Referendum, analysts believe that fall in demand is also a result of buyers bringing forward transactions to beat the April stamp duty deadline.
Stephen Matthews, director at London estate agent Greene & Co, said: “Both buyers and sellers are choosing to wait for the result rather than acting now and as a result we’ve seen a slowdown in activity levels over the last few weeks. It’s important to note however that despite speculation, we see this merely as being a delay to the market; as with all elections and referendums, the property market experiences a slight dip and normally recovers relatively quickly once the results are known.
“It is important to remember that the property market is often driven by need – families need to move because of schools, jobs and changing circumstances and those factors will always override economic uncertainty. In the case of a Brexit, it may take a little longer for the uncertainty to die away as we wait for the renegotiations with Brussels to take place but in the long term the UK property will return to its position and a bastion of strength.”
