Warning of house market slowdown after Brexit vote

EXPERTS have warned that Brexit uncertainty will deal a blow to the region’s housing market – and predict little growth in the next three years.

Fresh forecasts from estate agency Countrywide estimate that home price growth in the West Midlands will slow to 2.5 per cent next year, and will then fall by 0.5 per cent in 2017.

Growth has been as high as eight per cent in recent years.

Experts think growth will remain subdued into 2018, with only a modest two per cent increase predicted then – which is good news for firsttime buyers – but less so for homeowners.

The EU referendum is being blamed for unsettling the housing market and is being eyed for its potential impact on economic fundamentals such as trade and economic growth.

Countrywide’s chief economist Fionnuala Earley said: “Our central view is that the economy will avoid a hard landing, which is good news for housing markets.

“However, the weaker prospects for confidence, household incomes and the labour market mean that we do expect some modest falls in house prices before they return to positive growth towards the end of 2017 and into 2018.”

The average Birmingham property increased by 7.9 per cent in the year up to the Brexit vote, to £136,429, according to Rightmove.

Government statistics have yet to reveal a drop in market value after Brexit, with the June release only accounting for the initial seven-day period following the EU referendum results.

In the months ahead, Countrywide said, homeowners will continue to benefit from the UK’s limited housing supply, which will help prop up prices.

However, on the demand side, domestic buyers have found support from recordlow interest rates, which were recently slashed by the Bank of England to 0.25 per cent in a post-Brexit stimulus package.

Countrywide stressed that there was a higher than usual risk that its forecasts could change, citing the “extraordinary nature of the challenges ahead,” in negotiating the terms of Brexit.

“An orderly exit is in the interest of the remaining EU members and indeed global economies. That gives some room for an upside to these forecast numbers”, the report explained.

Our central view is that the economy will avoid a hard landing Fionnuala Earley