A slowdown of the housing market in the UK is influenced by political processes

The number of transactions in 20 key cities in the market of real estate in the UK declined by 2% over the past 12 months, but housing prices continue to rise, an increase of 10.2% for the year.

The Hometrack index shows that the number of transactions c London property fell by 7%, and the number of transactions with real estate in Cambridge – 20%.

Price inflation for housing in British cities, which is primarily due to the lack of supply in the market, amounted to £ 8,6% per year, the average price of a residential facility in the cities of the UK is now £231700 , and in Glasgow it’s only £109000 , but in London – £455000.

Meanwhile, the year 2015 was marked by a slowdown in prices in the southern cities of England. The reduction in the supply of new housing has led to a General market slowdown, and the lack of available units for sale inhibits the activity of buyers.

Another reason for slowing activity in the coming months will be a mood of uncertainty in connection with the upcoming referendum on secession of the UK from the EU.

These processes occur against the backdrop of increasing rates of Stamp duty for investors, which should happen in April. Every fifth transaction in the market of real estate of great Britain is investors ‘ optimism diminishes. The forthcoming referendum adds complexity to the already not simple situation in the market. If to draw Parallels with the referendum on secession of Scotland from the UK, the market for the 18 months preceding the referendum, the number of transactions fell by 10%.

The slowdown in the number of transactions observed in large cities such as London, Cambridge, Oxford and Aberdeen for the past 3 years, this despite the fact that the growth of housing prices in these cities has been observed for 6 consecutive years.

Thus, sentiment in the property market in the UK is now influenced not so much the market and how much influence political processes. Therefore, investors in the purchase of real estate should carefully weigh the risks and take into account all the circumstances that can affect the market in the future.

® Maxim Savitsky G. 25.02.2016

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