House prices in the UK recorded their third monthly consecutive decrease in a row in May, the first time this has happened since 2009, according to the Nationwide Building Society. Values decreased by 0.2 per cent month-on-month after a 0.4 per cent dip in April and 0.3 per cent in March. There has also been a fall in mortgage approvals and the Royal Institution of Chartered Surveyors (RICS) has described the market as “stagnant.” While lower house prices may be attractive to buyers, it is less tempting for sellers. RICS has reported agents have recorded fewer new instructions this year and the stock for estate agents is close to all-time lows. Research from Homeowners Alliance, a campaigning and advice body, and BLP insurance, suggests that more than one million adults have put on hold plans to buy a property because of the vote to leave the EU. The Brexit result is just one of several factors causing people to stay put rather than move. The research found 7.5 million people shelved plans to move this year. One quarter said this was due to increased costs of living, one quarter difficulty of securing a mortgage or re-mortgaging and one-in-six the referendum result.

Chris Knapman, owner and mortgage advisor at The Mortgage Guy in Plymouth: “There is concern about what will happen to house prices. But if you buy high and sell high – it is all relative. If you buy and house prices drop, it only matters if you sell when prices are low but if you sit tight, it is less of an issue.

“The second issue is what mortgages will cost in future. At the moment, interest rates are low and mortgages are cheap but there is concern that rates are going to go up. But historically rates tend to stay low in times of financial turmoil because if they are put up, it compounds the issue. So, our gut feeling is rates will stay low for a long period.

“Some clients take that on board but others fear interest rates shooting up again. So, uncertainty over Brexit has made people hesitant but on the flip side it has helped to holdprices down which is positive. It’s a double-edged sword really.”  

Martin Ellis, Halifax housing economist, says the rapid house price growth between 2014 and 2016 hit affordability and put the brakes on demand.

“Signs of a decline in job creation and the beginnings of a squeeze on households’ finances as a result of increasing inflation, may also be constraining demand for homes.

“Continuing very low mortgage rates, together with an ongoing acute shortage of properties for sale, should nonetheless underpin house prices over the coming months.”

Mark Andrews, sales manager at the London Bridge office of Daniel Cobb independent estate agents, saw the property market stall immediately after the vote to leave the EU.

“It just stopped literally almost overnight. People didn’t pull out of sales they had committed to but it was very significantly down in terms of people looking for properties.”

Mr Andrews said the market picked up by the fourth quarter of 2016 only to slow again when the general election was called. “I think for us, uncertainty over the general election is having a greater impact than Brexit,” he said.

London is bearing the brunt of the slowdown and house prices fell by an average 1.5 per cent in February and March after a decade of rapid growth, according to the Nationwide Building Society.

“Whatever happens in London happens elsewhere in the country in two to three or six months’ time,” said Mr Andrews. The estate agent said large numbers of would-be buyers are keeping a close eye on property websites to spot bargains.

Mr Andrew said: “You can tell when a property represents better value for money because the phones immediately starts ringing with people asking to view it.”

Sellers are having to be more realistic about property values while buyers are looking for discounts, say estate agents.

 “Sellers are recognising it may mean they take less on the sale but if they can achieve the same percentage reduction on purchase, they are no worse off than in any market,” said Mr Andrews, adding: “The differential is king.”