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EU vote could slow house price growth


House price growth in the UK could slow down due to the uncertainty of the EU referendum, according to the Halifax.

The lender claimed that property prices in the UK have increased by 10.1% over the past 12 months, which means that the average residential property is now worth £214,811.

However, the mortgage lender has suggested that this growth could be set to slow down, because of the possibility of the UK leaving the EU when the referendum is held on the 23rd June. They also said that “worsening sentiment” towards the UK economy could be a factor in any downturn.

Additionally, only parts of the UK are registering significant growth, according to the Office for National Statistics (ONS), causing further uncertainty for some areas. They said that while prices across England rose by an average of 8.6% in 2015, Scotland prices only increased by 0.1%, whilst Northern Ireland prices increased by 0.8% and there was a price fall of 0.3% in Wales.

Supply shortage

Despite this uncertainty, Martin Ellis, housing economist at the Halifax maintained that long-term house price growth will remain robust. He said that this was because demand is still outstripping supply, whilst low interest rates and unemployment levels should ensure this remains to be the case.

One North London estate agent, Jeremy Leaf said: "At the coalface there is still a general shortage of the sort of property that people want to buy."

However, he did say that the recent stamp duty increase could have a negative effect on prices.

Mr Leaf stated: "Although more property is coming onto the market, much of it is aimed at investors who understandably are more reluctant to proceed because of higher stamp duty charges."

The government recently introduced a surcharge on stamp duty for landlords and those buying a second home. This means that those who are hoping to purchase a buy-to-let or second home will face an additional 3% surcharge on the value of their property.

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