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Halifax predicts stability in the market next year

Halifax has predicted broad stability anticipated in house prices next year with between 2% and 4% price inflation, though this is dependent on the Brexit outcome.

The Halifax UK Housing Market Outlook for 2019 also predicted shortage of homes for sale and low levels of housebuilding will continue to support high prices, constraining demand.

Russell Galley, managing director, Halifax, said: “The housing market in 2018 followed a similar trend to recent years. In line with our expectations, house price growth slowed whilst building activity, completed sales and mortgage approvals all remained relatively flat.

“This was driven by a combination of continued uncertainty regarding the future growth prospects of the UK economy, and the ongoing challenge faced by prospective buyers in building up the necessary deposits.

“Looking ahead, aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes.

“Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be pushed significantly in either direction.”

The outlook found housing market performed in line with expectations over the past year, at the lower end of our forecast 0% to 3% growth.

Galley added: “Despite current political upheaval, and on the basis that it is still most likely that the UK exits the EU with a form of withdrawal agreement and transition period, we expect annual house price growth nationally to be in the range of 2% to 4% by the end of 2019.

“This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, the uncertainty around how Brexit plays out means there are risks to both sides of our forecast.

“Longer term, the most important issue for the housing market remains addressing the affordability challenge for younger generations through more dynamic housebuilding.”

Source: Mortgage Introducer

buy-to-let masterclass UK property nationwide
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Buy-to-let: UK property investment hotspots in 2019

Experts reveal the five places where landlords and property investors could make a tidy profit this year.

With Brexit looming the prospects for the UK property market are even trickier to predict than usual in 2019.

But for those looking to invest in buy-to-let next year, experts believe there are a number of areas that could prove profitable whatever happens at Westminster and in Brussels.

Nottingham

According to the latest figures from Nationwide, the East Midlands property market experienced the second-highest growth rate in the country in the year to September.

On top of that, a student population of almost 40,000, many of whom want to live centrally, means there are plenty of potential tenants.

UK property

“Property prices in Nottingham are lower than the national average while the rental market is strong, making it a lucrative spot for landlords,” says Rob Bence, co-host of The Property Podcast.

“There are also a lot of planning applications currently being considered for major developments in the city meaning 2019 could be an exciting year for it. It’s currently under the radar for property investors, but I don’t expect that to last.”

Recent research by credit report specialists TotallyMoney showed two Nottingham postcodes were in the top five in the country for buy-to-let yields. NG1 in the city centre was the highest rated with an average yield of 12%. NG7 was in fifth place with almost 9%.

South Wales

Swansea and Newport in South Wales could both be hotspots in 2019, according to independent property strategist and investor Mike Frisby.

“Swansea is doing well because it’s always been affordable, yields are good there and demand is picking up,” he says.

UK property

Meanwhile, the recent scrapping of the toll on the Severn Bridge crossing between England and Wales could have a big effect in Newport.

“Getting rid of that charge will make Bristol commutable from Newport and it should lead to a big boost in demand,” Mike says.

The latest figures back up that view too. A recent Housesimple report showed property prices in Newport have risen by, on average, more than 8% in 2018.

“Cardiff is also doing well as a city but properties there are a bit pricier than in Swansea and Newport,” adds Mike.

Edinburgh

Recent figures from Zoopla show that properties in Edinburgh are the fastest selling in the country, taking just 22 days on average to shift.

The city’s housing market is buoyant with opportunities, according to the experts, in a number of areas.
Malcolm Leslie, Director of Residential Agency at Strutt & Parker says: “In terms of buy-to-let the Edinburgh market has been exceptionally strong over the last two years and a lot of that is driven by Airbnb.

“There can be spectacular returns for people investing for that reason. A really good property off the Royal Mile can yield spectacularly. And it’s all year round.”

UK property

But it’s not just about being close to the main tourist attractions and renting on a short-term basis.

“There are new developments going on in the east of the city in the old St James’s Centre,” says Malcolm. “That will pull values up in the east end and anywhere accessible to that.

“There is also regeneration going on in Haymarket in the west end. One area there, Dalry, looks like a very good place to invest.”

Liverpool

Liverpool’s property market was on course to reach a value of £1bn in 2018 and the total spent on house sales has more than doubled since 2012.

That’s according to a report, from property data and technology provider Search Acumen, which found the average house price among Liverpool residents has risen by almost £21,000 in five years, around 16%.

UK property

Rob Bence says: “Liverpool has seen huge investment over the last few years and there are several major development projects underway that will have a massive impact on the city.

“There’s a strong student population thanks to the city’s four universities and the city centre has been given a new lease of life in recent years and now boasts one of the most impressive food and drink scenes in the region, if not the country. Prices are rising but it’s still possible to grab hold of a bargain and achieve a strong yield.”

Birmingham

Birmingham is the UK’s second biggest city but it has lagged behind its competitors in recent years in terms of property price growth. The latest figures suggest that might be changing, though.

Official figures show Birmingham was the number one destination for people relocating from London last year, with over 7,000 making the switch.

UK property

“HS2 is being built to provide high-speed transport links from London and the local economy is strong,” says Mike Frisby.

“Also, a number of head offices have relocated to Birmingham from London and that means there are good job prospects and increased demand for housing.”

It’s not just Birmingham that could do well in that area either.

Mike says: “The whole of the Midlands is looking good because there are an awful lot of distribution warehouses being built and houses springing up nearby. That’s also creating demand for rental properties.

“The affordability there is good too because those areas can be cheaper than elsewhere, particularly in comparison to wages.”

Source: Love Money

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Bank of England keeps interest rates on hold amid Brexit slowdown

The Bank of England has kept interest rates on hold at 0.75 per cent as it cautioned “intensified” Brexit uncertainties were slamming the brakes on UK growth.

Policymakers on the bank’s nine-strong Monetary Policy Committee (MPC) voted unanimously to keep rates unchanged in its last decision of 2018.

The bank said no-deal Brexit fears had “intensified considerably” since its last meeting and these were hitting financial markets, bank funding costs and the pound, as well as the wider economy.

The bank warned internal estimates suggested UK growth was set to slow by more than previously expected to 0.2 per cent in the final three months of the year, down sharply on 0.6 per cent seen in the heatwave-boosted third quarter.

It added growth was likely to remain around that level in the first three months of next year. This was worse than first feared by the bank, which said in November that growth was likely to slow to 0.3 per cent in the fourth quarter and recover to around 0.4 per cent thereafter.

In minutes of the rates meeting, the bank said: “The further intensification of Brexit uncertainties, coupled with the slowing global economy has also weighed on the outlook for UK growth. “Business investment has fallen for each of the past three quarters and is likely to remain weak in the near term.”

The housing market has remained subdued and retail spending was showing signs of slowing, the bank said. But the bank said it had looked to separate the “shorter-term developments” from the dynamics of the economy.

It reiterated that, assuming the economy grew in line with forecasts and assuming an orderly Brexit, rates would likely need to rise by a “gradual pace and to a limited extent” to bring inflation – currently running at 2.3 per cent – back to target.

It also stands ready to respond to the fallout from Brexit, warning once more than rates could go “in either direction” even in a cliff-edge withdrawal. Agriculture co-op to create Aberdeen business hub Just weeks ago, the bank warned in its Brexit scenario analysis that Britain could be tipped into a recession worse than the financial crisis in the event of a no-deal disorderly Brexit.

Governor Mark Carney has insisted that rates could go up or down after a cliff-edge Brexit, with the bank’s analysis warning they might be hiked to 5.5 per cent if a further fall in the pound sends inflation soaring. In the controversial documents requested by the Treasury Select Committee, the bank predicted the worst-case scenario could see GDP fall by 8 per cent, the pound plunge by 25 per cent and house prices tumble 30 per cent.

The minutes of the latest MPC meeting also flagged up slowing global growth, particularly in the euro area where it said the slowdown had been marked.

But it said Chancellor Philip Hammond’s recent Budget announcements would offer a boost to GDP, forecasting these would add around 0.3 per cent over the next three years.

The Bank also offered some cheer to households as it said current internal estimates saw inflation, which eased back to 2.3 per cent in November, dropping further to around 1.75 per cent in January thanks to lower fuel prices and Budget measures.

Inflation would also remain below the 2 per cent target for the following three months before picking up later in 2019. On the outlook for rates, Andrew Goodwin, an economist at Oxford Economics, said: “It is virtually inconceivable that the committee will move this side of March 29.”

He added: “We expect the acceleration in wage growth to peter out in the new year and, with inflation set to drop some way below target, we think that the Committee will struggle to sustain its hawkish rhetoric. “We continue to forecast one 25 basis point rate hike in 2019, with the risks skewed towards policy remaining on hold all year.”

But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said if a deal is agreed, the Bank “won’t waste any time to raise interest rates”.

“We continue to think that the MPC won’t wait for signs of a recovery to emerge in the data and will raise bank rate to 1 per cent in May, once MPs have signed off a Brexit deal late in the first quarter,” he said.

Source: Scotsman

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Alternative funding sector buoyant despite Brexit concerns

The alternative funding sector ‘sustained its willingness to think outside of the mainstream’ in 2018, according to Independent Growth Finance (IGF) boss John Onslow, although Brexit remains its “single greatest barrier”.

IGF provides flexible, asset-based funding to small and medium-sized enterprises (SMEs) across the UK.

John Onslow told Insider more companies are turning to alternative finance as it can be “key to achieving real growth without diluting equity”.

He added that the market had been driven by high liquidity levels in 2018, as well as high publicity for the sector itself.

However, on the UK’s exit of the European Union, Onslow said: “Uncertainty over Brexit has caused some investment to be deferred this year and the implications of Brexit remain the single greatest barrier. 2018 has challenged the resilience of business.”

Research by IGF found that 500 SMEs in the £1m to £100m-turnover bracket said Brexit was their greatest concern. A third had experienced problems with funding requests being rejected, along with issues relating to slow decision-making or turnaround times.

Onslow added: “Political considerations – including Brexit and highly-profiled trade wars – have captured the consciousness of even the smallest SME.

“Despite the SME Health Index finding business confidence has declined, in IGF we have seen a sustained stream of SMEs achieving real growth in 2018, working hard to drive their momentum.”

The firm has also overcome challenges by working with business introducers across the UK and by investing in its staff. In the 12 months to 30 September 2018, IGF’s funds advanced were up by 70 per cent.

“The challenge is to stay relevant and ahead of market trends, whilst delivering value for money through excellent service,” Onslow told Insider.

IGF is headquartered in Redhill, Surrey. In November 2018 it was named Insider‘s Alternative Funder of the Year at the Central and East Dealmakers Awards.

Source: Insider Media

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What’s happening to rented social housing in England?

Social housing is low cost rented housing and low cost home ownership for people who may not be able to access the private market. It includes council housing and homes provided by housing associations. In this piece we’ll be focusing on rented accommodation available in the social housing sector.

Housing is a devolved issue so the UK government only has responsibility for England, and statistics for Scotland, Wales and Northern Ireland are published separately.

The amount of social housing for rent is slowly rising

Over four million homes were rented from councils or housing associations in 2017. Of these, 1.6 million were council homes and 2.4 million were from housing associations.

The amount of social housing for rent fell from the peak of around five million in the early 1980s to just under four million in the mid-2000s, but it has been slowly rising since.

This has mainly been driven by an increase in housing association homes. The proportion of all social housing provided by councils has generally been falling since the 1980s.

social housing

Homes for rent from councils and housing associations made up 17% of all homes (including owner-occupied homes) in 2017.

social housing

New social homes are more likely to be at the higher end of affordable rents

Around 5,000 new homes were built for social rent in England in 2017/18, and another 1,000 or so were bought or converted. These “social rent” levels are around 50% of market prices.

There were another 24,000 newly built homes for affordable rent and around 2,000 bought or converted. Affordable rent is subject to controls that make it around 80% of local market rent. The government includes “affordable rent” homes in its definition of social housing.

The number of new properties at affordable rent level has outstripped the number of new homes at social rent levels since 2013/14. However, most new lettings are still at social rents.

social housing

There are also a small number of homes built or acquired for intermediate rent, which are available at “above social rent, but below market levels”, according to the House of Commons library. Homes available for intermediate rent are counted in the government’s definition of affordable homes.

Less than one percent of social housing was sold in 2016/17

Social housing is sold in several ways. The Right to Buy scheme for council housing is perhaps the most well-known, and there are similar schemes for tenants buying their home from housing associations.

Right to Buy schemes give some tenants who have lived in a council or housing association home for a number of years the right to buy their home at a discount.

Over 16,000 homes were sold under Right to Buy schemes in 2017/18. That’s 11% fewer than the year before, and well below the peak of 167,000 in 1982/83.

social housing

In 2017/18 there were also around 5,000 other types of social housing sales. This brought total sales to nearly 21,000.

The Right to Buy one-for-one replacement target isn’t being met

When the government increased the discounts available through Right to Buy in 2012 they committed to one-for-one replacement of all the additional homes this policy sold within three years of the sale. That target isn’t being met.

The government calculated that around 21,000 extra homes were sold between April-June 2012 and the same period in 2015. Meanwhile only about 19,000 have been built or bought by local authorities since 2012.

Housing association rents are higher than what councils charge

The average weekly rent for council housing across England was about £87 in 2016/17. That figure includes both social rents and the higher affordable rents.

The most expensive average annual council house rent was in Westminster (£132 a week), the cheapest was Broxtowe, in Nottinghamshire (£67 a week).

social housing

In social housing provided by housing associations the average weekly rent was around £97 in March 2017.

Within these averages there is wide variation across the country. The highest was almost £140 per week in Newham, London, and the lowest (£73 per week) was in County Durham.

Another measure of average rents comes from the English Housing Survey. The median social renter paid £96 per week in 2016/17, while the median private renter paid £156 per week. ‘Median’ means that if we lined everyone up in order from those paying the highest to the lowest rent, the median renter would be stood in the middle.

More social housing is passing the decent homes test

There are four official criteria for a “decent home”:

  • It meets the current statutory minimum standard for housing.
  • It is in a reasonable state of repair.
  • It has reasonably modern facilities and services.
  • It has efficient heating and insulation.

There are two ways of measuring how many homes are decent: from information supplied by social housing landlords and by looking at what people tell a survey. Although both give different figures for the proportion of homes that aren’t in a decent condition, they show a similar trend.

Looking at all types of social homes the percentage that don’t qualify as decent homes has been falling since 2008. According to data supplied by councils and housing associations, the share of their homes that fail has fallen from 38% in 2002 to 2% in 2017.

The English Housing Survey, which inspects a sample of all homes, found 27% of social housing wasn’t of decent quality in 2008, falling to 13% in 2016.

Base Rate
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68% of brokers think Base Rate had no impact on their businesses

More than two thirds (68%) believe that the two Bank of England Base Rate increases seen since November 2017 had no impact on their business, United Trust Bank’s broker sentiment survey has found.

The Base Rate currently stands at 0.75% following an increase from 0.50% on 2 of August this year.  The rate was increased from 0.25% to 0.50% on the 2nd of November 2017.

Some 16% of brokers felt the two increases had had a positive impact on their businesses as opposed to 16% who felt they had had a negative impact.

Harley Kagan, group managing director – United Trust Bank, said: “It is encouraging to see that for a majority of brokers the two Base Rate increases have had little to no impact on their businesses over the last 12 months.

“I believe the same is broadly true from a lender perspective although expectations of higher mortgage rates to come may have been a contributing factor to a general cooling of activity in the residential property market.

“Developers and housebuilders need to be mindful of future demand and pressure on pricing when planning future projects and that, coupled with Brexit uncertainty, is causing some to take their foot off the gas with new starts.

“The Base Rate has been less than 1.0% for the best part of 10 years. Originally a measure to stave off the worst effects of the financial crisis, for many, and especially the latest generation of consumers and borrowers, ultra-low interest rates are now the norm.”

Kagan added: “As such it doesn’t take much of an increase to inject some nervousness into the market, especially for first-time buyers.

“However, a return to the interest rates seen before the credit crunch seems unlikely. Whilst a 5% Base Rate appeared reasonable in 2008, the PRA recently challenged the resilience of banks and other lenders using a 4% Base Rate for stress testing, an indication perhaps of what they believe would be an extraordinary interest rate for the current economic environment.

“Hopefully, once the nature of our future relationship with the EU is clearer and uncertainty in the economy is replaced with stability, buyers will be back in even greater numbers and housebuilders will be more encouraged to get on with tackling the UK’s inherent housing shortage.”

However, when asked what impact the increases have had on the UK’s residential property market over the last 12 months, 27% believed the effect had been negative.

Nearly half (46%) expected one more increase of 0.25% between now and the end of 2019, taking the Base Rate to 1.0%, while 12% expected the rate to fall.

Source: Mortgage Introducer

RICS Buyers
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RICS warns that agents will have a tough time of it next year

The Royal Institution of Chartered Surveyors warns today that the UK housing market has a tough year ahead of it.

The RICS is forecasting that overall sales volumes will be down by around 5%, while house price growth is likely to stall – although lack of supply should prevent outright falls.

The RICS is also predicting that rental price growth will accelerate slightly next year, because of a declining availability of homes to let.

The organisation said that the housing market has lacked impetus this year, due to Brexit uncertainty, lack of homes on agents’ books, affordability issues, and the possibility of interest rate rises.

It says: “In the past two years sales activity has declined and annual completed transactions remain significantly below the 1.7m high in 2006.

“Given the obstacles in the current market it is anticipated that activity will weaken further.

“As sales activity continues to falter, house price growth will continue to fade in the first half of the year, and is expected to come to a standstill by mid-2019.”

Hew Edgar, head of policy at the RICS, said: “Looking at transaction levels, residential property taxation is in urgent need of review; and this goes for both SDLT and the current council tax system.

“Both affect buying behaviours and therefore market activity, with council tax being particularly outdated.

“If the Government wish to alleviate market concerns, that will persist Brexit or otherwise, then all possibly approaches and outcomes should be considered, including looking at tackling the rising number of long-term empty homes.

“These number 250,000 across the UK – a figure that borders on the Government’s new homes target.”

Belvoir agreed with the RICS forecast for next year, saying that in a market with falling property transactions more people will be likely to rent.

Chris Cooper, of London firm Berkshire Hathaway HomeServices Kay, said: “With uncertainty still swamping parts of the sales market, 2019 is set to be a big year for lettings.

“We’ve seen a great level of demand right the way through the year, from both domestic and international tenants, even those within the EU, and I can’t see that this will slow down in the foreseeable future.”

Residential property management firm FirstPort said that next year will be when Build to Rent really has to deliver at speed and scale.

It said that new investors in the UK Build to Rent market would emerge from Canada, the USA, France and the Netherlands.

Alexandra Morris, managing director of lettings platform MakeUrMove, said she expects the housing market to slow down dramatically next year.

Forecasting that home movers would slam the brakes on plans to buy or sell, she said: “Because it will be a time of uncertainty, it’s likely that people will be more cautious about making commitments such as buying property.

“Buying conditions may also become more difficult. Instead, it’s likely larger landlords will grow in 2019 as they acquire these properties because they will be able to spread the risk.

“With uncertainty about the rights of EU workers if the UK leaves without a deal, areas of the country where landlords provide accommodation to large EU migrant communities could also be affected next year.

“If EU workers return to the continent, there will be a host of empty houses and flats. Landlords will be hit financially if they can’t find new tenants to let the properties.

“This will have a knock-on effect on rental prices. In areas where there is then an oversupply of rental properties, landlords will be forced to reduce rents or sell.”

She also forecast that the tenants’ fee ban will not come in until next autumn.

Source: Property Industry Eye

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Investing in commercial property: beware the Brexit clause?

Last month saw an apocalyptic picture painted about the impact of Brexit. The Bank of England warned that commercial property values could fall 48% in the event of a No-deal – worse than the global financial crisis – and even a more “orderly” Brexit could see a 27% drop.

The severity of the warning seemingly took many by surprise. However, the negotiations and the resulting wider economic uncertainty have been impacting commercial property valuations and tenant demand for some time.

‘Brexit clauses’ have become a feature of commercial property valuations since the Referendum, stipulating that values can’t be guaranteed following the March deadline. But while previously, these clauses were typically buried in the “boilerplate” wording, now they’re front and centre, presenting a much bigger obstacle for institutional investors. Funds are increasingly sitting on their hands, with some suspending or aborting live deals, reluctant to gamble stakeholders’ money in a market with such a blind spot.

Silver linings, not Brexit blues

But this isn’t Armageddon. One person’s risk is another’s opportunity and the vacuum left by institutional investors has left the door open for cash-rich private or family office investors. With no institutional shareholders and often no short-term debt pressures to satisfy, they can take a longer-term view. They’re actively looking to price and pursue risk, especially (soon to be) vacant properties and will remain a force to be reckoned with in this period of Brexit limbo.

A simple reading of the Central Bank’s numbers also ignores the fundamentals underpinning UK real estate. The headlines might say differently, but our major cities continue to be buoyed by overseas capital. Over three-quarters of the £5.3bn spent on Central London office transactions in Q2 this year came from foreign buyers.

So before everyone pours freezing cold water on the market, we should remember that Sterling’s devaluation has ensured that UK real estate remains attractive. And, with investors now getting more bang for their buck, we’re arguably more appealing than other territories. Compared to many other competitor markets we have more transparent, real-time data available, alongside a mature professional infrastructure and easy access to finance to aid investment decisions.

There’s also the intangible: certain investors will always want to be in the UK and feel a sense of inherent security investing here. It may not feel like it now, but historically we are far more politically stable than many other countries and have a well-established rule of law. Depending on where you sit, these are key factors for investors’ wish lists.

Yes, Brexit presents significant challenges. It would be foolish to pretend otherwise. But it doesn’t have to be a perennial spectre. Some might argue that the uncertainty generated by a potential change of government at Westminster because of Brexit – rather than Brexit per se – is a bigger concern and would have a more significant impact on investment decisions. With continued resignations and reshufflings, no one can say for certain what will happen politically.

When the dust settles however, just as after every major disruption to the sector in the past 30 years, we’re likely to find that a number of risk-savvy, cash-rich operators have done well from the uncertainty and will be well-positioned for whatever the post-Brexit World throws at us.

Source: Property Week

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Overseas Property Investor Numbers Fall

The number of UK buy to let property investments let out by investors based overseas has more than halved in the last eight years.

The latest data released by Hamptons International has revealed that the percentage of overseas based landlords letting buy to let properties in the UK fell from 14.4 per cent in 2010 to just 5.8 per cent in the first 11 months of 2018 – the lowest level on record.

Every region in the UK has seen a fall in the proportion of homes let by an overseas landlord since 2010.

The largest drop has been seen in London which has gone from one in four (26 per cent) of homes let in London owned by an overseas based landlord in 2010, to just 10.5 per cent this year. A fall of 15.5 per cent.

In other parts of the UK, the proportion of overseas based landlords has fallen by 10 per cent in the South East since 2010, followed by the North East and East Midlands, both experiencing a drop of 6 per cent.

Outside the capital, Yorkshire & the Humber has the highest proportion of homes let by an overseas based landlord (6.7 per cent), but this region has only seen a 4 per cent fall in overseas based landlords since 2010.

Western Europeans make up the biggest group of overseas based landlords at 34 per cent, followed by Asian (20 per cent) and North American (13 per cent).

However, since 2010 the proportion of Western European based landlords has fallen by 2.1 per cent, compensated for by a pickup in Asian landlords (+2.1 per cent). Middle Eastern based landlords have also risen by 1.4 per cent since 2010 and now account for 11 per cent of overseas based landlords.

Head of Research at Hamptons International, Aneisha Beveridge, said: ‘The proportion of homes let by an overseas based landlord has more than halved since 2010. Sterling’s depreciation since 2016 undoubtedly makes it cheaper for international buyers to purchase property in Great Britain. However, the conversion of pounds back into local currency means additional costs which cut into an overseas landlords’ monthly income. This combined with a harsher tax regime for overseas investors is dissuading some international investors from entering the rental market.

‘Throughout this year rental growth has been sluggish averaging 1.5 per cent and only passing 2.0 per cent on two occasions. Affordability is not just an issue for those looking to buy a home, but impacts tenants paying rent too. And these affordability barriers will continue to keep a cap on rental growth in the future.’

Source: Residential Landlord

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UK economy set for slowest growth since 2009 as Brexit nears

British economic growth this year and in 2019 looks set to be the weakest since the country’s last recession, due to a freeze in business investment and weak consumer demand ahead of Brexit, the British Chambers of Commerce forecast on Tuesday.

The business lobby said growth in 2018 was likely to slow to 1.2 percent before inching up to 1.3 percent in 2019, which would be the two weakest years since Britain emerged from recession in 2009 after the global financial crisis.

“While Brexit isn’t the only factor affecting businesses and trade, it is hugely important — and the lack of certainty over the UK’s future relationship with the EU has led to many firms hitting the pause button on their growth plans,” BCC director Adam Marshall said.

Britain’s economy has slowed since the Brexit referendum in 2016 and there is no guarantee that businesses and consumers will retain tariff-free access to European goods when Britain leaves the European Union which is scheduled for March 29.

The BCC said sterling’s weakness against the dollar and the euro was likely to continue to drive inflation, eating into consumers’ disposable income, while business investment was due to contract by 0.6 percent this year and barely grow the next.

Separately, the Royal Institution of Chartered Surveyors predicted that house prices would be flat next year, the first year with no growth since 2012, due to Brexit uncertainty and the inability of many buyers to afford higher prices.

“On the back of this, house price growth at a UK level seems set to lose further momentum, although the lack of supply and a still solid labour market backdrop will likely prevent negative trends,” RICS’s head of policy, Hew Edgar, said.

The number of houses being sold was likely to fall around 5 percent next year, RICS added.

Source: UK Reuters