Brexit is going to kill house prices, says the Royal Institute of Chartered Surveyors in a new report.
But we were warned about this already. Before Britons voted for the UK to leave the European Union on June 23, the Remain campaign, backed up by Treasury analysis, stressed that a Brexit would reduce UK house prices.
RICS said on Thursday that new buyer enquiries “declined significantly” in June, with 36% more chartered surveyors reporting a fall in interest as part of the June housing survey.
This is the lowest reading since mid-2008 when the financial crisis was in full swing.
Just over a quarter of surveyors said they expected a further drop in sales across the UK for the coming three months, which is the “most negative reading for near term expectations since 1998,” according to RICS.
London is already seeing declines in prices with a net balance of 46% seeing values slashed, mostly in central areas. Nationally 27% more respondents across the UK expected to see prices fall rather than rise. RICS said the trend had started a few months ago, with changes in stamp duty introduced earlier this year.
Here is the chart showing low levels of new vendor instructions:
And here is how bad it is getting for house prices in London:
And finally, here is buyer interest across the UK:
That has not put off AIM-listed property developer Telford Homes, which said on Thursday: “Following the outcome of the referendum, the Group still firmly believes in the longer term merits of building homes in London.”
“There remains a chronic shortage of supply and that will not change as a result of leaving the EU. The Board also believes that London will not lose its attraction both as an international centre of finance or as a place where people want to live and work,” the company said.
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