LISTEN: The looming EU referendum is set to weigh heavily on the housing market and could upset the medium-term stability of UK residential sector, according to JLL.
The agent forecast a moderate growth in activity in 2015, predicting overall residential prices to rise by 4% nationally in 2015 buffeted by a looming Brexit, London’s mayoral elections, and Scottish and further regional devolution.
“The level of uncertainty is not helpful for the housing market, whether it is 2017 or 2016 is irrelevant it is better that we just get on with it sooner rather than later, and then we can deal with it,” said Adam Challis, head of UK residential research at JLL.
Mortgage approval volumes and listing data have both increased, while transaction levels have risen to 1.3m over the last 12 months.
Specifically in London, next year’s mayoral elections could dash the confidence that was restored post-election.
Challis said: “We have got the mayoral elections coming up next year and it looks highly likely at the moment that Tessa Jowell, the Labour candidate, is likely to come through as the next mayor of London.
“That may mean that some of the proposals around the mansion tax, higher rates of council tax or around rent control may come back into the frame. It is something we need to be mindful of in terms of the impact on the housing market.”
The research predicted a 1.5% growth in prime residential prices in London for the rest of the year – despite the resurgence in deals seen after the general election.
Challis said that after the initial bounce-back – a result of a number of delayed deals – JLL expects a positive but more sedate burn that will lead to a greater level of activity in the autumn selling season.
