Search Articles

in

Latest Overseas Ads

Forest City Country Garden
Forest City Country Garden Johor Condominium, For Sale

Forest City - A New
Global City Forest
City, is a


Green Valley Estate
Green Valley Estate Chiang Mai Condominium, For Sale

Green Valley Condominium
Chiang Mai Acres of
ro


Country Garden Danga Bay
Country Garden Danga Bay Johor Condominium, For Sale

Project Name: Country
Garden Danga Bay Tenure:
Fre



Overseas Property News

Brexit vote causes real estate interest, sales to wither

BRITISH property website Rightmove said uncertainty created by last month's vote to leave the European Union had helped push down property transactions, in a further sign that the housing market could slow due to Brexit.

Posted on 28-Jul-2016

| More
Brexit vote causes real estate interest, sales to wither

BRITISH property website Rightmove said uncertainty created by last month's vote to leave the European Union had helped push down property transactions, in a further sign that the housing market could slow due to Brexit.

House prices are key to consumer confidence in Britain, where many gauge the strength of the economy by rises in the value of their most expensive asset, but some housebuilders and estate agents have warned that demand may cool in the coming months.

The Brexit vote caused buyer interest and expectations of future sales to wither at their fastest pace in years, according to a survey from the Royal Institution of Chartered Surveyors earlier this month.

But Britain's third-largest housebuilder, Taylor Wimpey, said on Wednesday that the referendum result had no meaningful effect on its performance, with trading in line with normal patterns and helped by government incentive schemes.

Rightmove, which posted a 21 per cent rise in operating profit in the first half of 2016, said some buyers had also rushed to buy homes before a property tax rise introduced in April, which reduced demand thereafter. "(Transactions) were lower year-on-year in the second quarter as a consequence of buyers having brought forward purchases . . . and due to the increased economic uncertainty in the lead up to the EU referendum," the firm said.

Taylor Wimpey chief executive Pete Redfern said schemes to promote housebuilding were one reason that demand for new homes was likely to remain stronger than for existing properties, which form a significant part of Rightmove's business. "You will see lower transactions in the second-hand market . . . I think a lot of that is to do with sellers more than buyers. Sellers are actually in some cases more cautious than buyers, which doesn't really impact on new build at all," he told Reuters.

Shares in Britain's major housebuilders and estate agents plunged after the Brexit vote and the share prices of the big four - Barratt, Persimmon, Taylor Wimpey and Berkeley - remain between 15 and 23 per cent lower than three months ago.

Thomson Reuters polling shows Britain's major housebuilders are likely to see profits rise in 2016, but a sudden drop in demand could hit sales.

Taylor Wimpey, which posted a 12 per cent rise in pre-tax profit to 267 million (S$476 million) in the first half of 2016, said it had slowed the pace of land buying shortly after the EU vote and looked again at some housebuilding programmes. "We haven't actively slowed our programmes on any sites but we'll continue to look at trading over the next few weeks," Mr Redfern said.

The firm, which built around 7 per cent of its 6,000 properties in London, could be less affected than agents and builders more reliant on the capital, where there has been a slowdown in the most expensive areas for several months.

London-focused estate agents Foxtons said shortly after the referendum that Brexit was likely to prolong uncertainty in the property market, resulting in a drop in its full-year earnings. REUTERS

The Business Times

View articles from these categories