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Housing market holds steady despite Brexit verdict

Published 23/08/2016

Stamp duty and the difficulty of saving for a deposit could put off London's first-time house buyers, it has been claimed
Stamp duty and the difficulty of saving for a deposit could put off London's first-time house buyers, it has been claimed

The UK housing market proved resilient in the first month after the Brexit vote despite a slowdown for commercial property , a report has found.

Data from HM Revenue and Customs showed the number of residential transactions slipped 0.9% month-on-month to 94,550 in July compared to 95,430 in June.

The buying and selling of commercial buildings came under pressure, dropping 7.5% month-on-month to 9,820 in July, down from 10,620 the month before.

Stephen Smith, director of the Legal & General Housing Partnerships, urged caution over pinning the declines on the Brexit vote.

He said the fall could also be caused by the "seasonal lull" over the summer months.

"What these figures really highlight is the ongoing imbalance in supply and demand that is plaguing our housing market," he added.

Investors have punished housing stocks following the EU referendum result amid concerns Brexit uncertainty could deal a blow to demand.

However, housebuilders have bucked expectations to drive home rising revenues and profits.

Charles Church-builder Persimmon is the latest to shrug off referendum concerns to book a 29% rise in pre-tax profits to £352.3 million for the first half of the year. Revenues also increased 12% to £1.49 billion.

The strong update comes after Bovis Homes notched up a double-digit rise in half-year profits and said the ''underlying market fundamentals'' for the UK housing market remained positive.

Andrew Bridges, managing director of Stirling Ackroyd, said the "slight stutter" in the property markets was not a cause for alarm.

He said the barriers caused by stamp duty and the difficulty of saving for a deposit could put off London's first-time buyers.

"In London these problems will sharpen over the next couple of months as lower interest rates encourage buyers to grab a property with a cheaper mortgage, putting those with small deposits at a disadvantage," he added.

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