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Unexpected outcome of the British referendum had a direct impact on the UK housing market, causing a sharp drop in interest from buyers and reduce index future sales at the fastest pace in recent years. This was reported on the results of studies of the Royal Institution of Chartered Surveyors (RICS).
The balance of housing prices dropped in June to +16 against +19 in May. While economists had expected a more significant reduction (up to 10), the latest reading was the lowest since January last year. In general, the results of RICS study adds evidence that the outcome of the referendum is already having a noticeable impact on the economy.
Purchases of new homes fell at the fastest pace since mid-2008, roughly when Britain was in recession. Meanwhile, the rate of future sales fell at the fastest pace since the beginning of this statistic, ie from 1998. We also learned that the balance among respondents expecting the fall in housing prices in the next three months, rose to its highest level in a little over five years.
"Recent data suggest that activity will remain weak in the coming months, but a critical impact awaits us in the future, and it will depend on the ability of the economy to cope with the uncertainty of Brekzita." - Said the chief economist at RICS Simon Rubinson.
The results of the RICS Research officials interested in the Bank of England, which is expected today will reduce interest rates to a new record low of 0.25 per cent, to help ease the shock to the UK economy from Brexit.
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