Bank of England figures show that during July, immediately after the Brexit vote, the number of UK mortgage approvals plunged to the lowest level in 18 months.
However, the UK housing market is showing signs of a post-referendum pick-up heading into autumn as it recovers from "paralysis" in the immediate aftermath of the decision to quit the European Union.
Experts believe buyers are now moving forward and getting on with their lives, breathing new life into the property market.
The Council of Mortgage Lenders recently reported lending had rebounded in August – and the body said fears voiced in recent months about the housing market have “proved to be wide of the mark”.
Paralysis
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said: "The vote was a surprise, and what you found was that there was, as is often the case with a shock to any market, there's a degree of paralysis that creeps in.
“It’s understandable, because people are making a very big decision with buying a house and they don’t know many things, they don’t know what that means for interest rates, they don’t know if there’s going to be mortgage funding around, they don’t know whether it means there’s going to be job losses, job gains – these sorts of uncertainties are always associated with big political events.”
Mr Rubinsohn said swift action from the Bank of England had helped to support confidence.
He continued: “What we’ve seen in our last survey in August is a more stable trend in activity – so we saw sales agreed stop falling and stabilise.
“We also saw buyer inquiries beginning to steady, having fallen for a couple of months. So that’s a signal that perhaps people are no longer getting more and more worried, they’re beginning to see some light and they think that there is perhaps a bit more opportunity.”
He said what came out “loud and clear” from comments in the August survey from Rics was that underlying factors in the market had returned to what they were before the referendum – with surveyors reporting concerns over a lack of stock and tax issues for investors.
Mr Rubinsohn said the full impact of Brexit on the economy may not be known for up to two years – “possibly even more”.
Realism
Mark Hayward, managing director of National Association of Estate Agents (NAEA), said falls in the levels of sales and inquiries were seen immediately after the referendum vote.
But he said a pick-up in activity has already started, and having spoken to the NAEA’s members across the UK, “generally there are good levels of activity and good levels of sales”.
Mr Hayward said there is now “more realism in the market”, adding “If a property is priced correctly, it will sell”.
He continued: “There is slight caution, but that caution has interest behind it. But it’s not so frenetic in terms of: ‘I need to do this quickly.’
“At least now, you have a little time to think about whether you want to buy a property – but we’ve still got a dire lack of stock on the market.”
