A report by business consultancy PwC has said the fall in property transactions is the economic indicator where Brexit uncertainty is being felt the most.
PwC also warns that the UK housing market is likely to experience a continued slowdown In house price growth with inflation likely to be 3.7% this year, compared to 7% in 2016.
New figures from HMRC show that housing transactions fell in June for the third month in a row, with sales volumes down 3.3% compared to May.
There were 96, 910 properties sold in June, the lowest monthly total since October 2016 and the first time this year that sales have fallen below 100,000 in a single month.
In a wide-ranging and downbeat report on the prospects for the British economy as Brexit negotiations get underway, PwC said the housing market was already feeling the effects of the UK’s exit from the EU, with London the suffering the worst.
Growing unaffordability in the capital, political uncertainty, Stamp Duty and the possibility that London based companies may pull out of the UK are all combining to drag the housing market in the city down.
Richard Snook, senior economist at PwC, said; “The affordability crisis within London has seen first time buyers in particular struggling to buy in the capital. In 2016, house prices in London were 13 times median earnings, while commuter belt towns offer a lower, albeit still high, ratio of nine times earnings.”
The Scottish housing market is also highlighted as one area that is struggling, with many regions still not returning to their pre-recession levels. Inverclyde, East Ayrshire, North Ayrshire and West Dunbartonshire are the worst performing areas in Scotland.
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