As the Brexit vote came to a close last year, many close to the housing market had ideas about the short term and long term future. So far an abundance of uncertainty has been hanging about, although some issues have started to come into focus. For one, housing prices are beginning to show signs of decline, especially in London. Second, the amount of construction activity, both residential and commercial, has begun to slow down.

Construction has now felt a contraction for the first time since the days of the Brexit vote. As the amount of new work has slowed, the sector is going through the first shrink of PMI in more than a year. According to figures from the Markit/CIPS UK construction PMI report, the level has now fallen to 48.1 during the month of September. This is down from the August level of 51.1.

The estimated figure for the month of September was 51 which was forecasted by economists through a Reuters poll.

The drop in PMI indicates new work is not replacing finished contracts across the country. It is also a clear indication of a lack of appetite of assumed risk now present in the market, especially on the commercial side.

New construction in both residential and commercial is expected to create a clearer path following the outcome of Brexit negotiations. At that time more will be known concerning taxation, new building regulations, and the future of interest rates.

Interest rates are a hinge pin for much of what takes place in the housing market. The fall in the amount of construction activity has some economists thinking the hike in interest rates expected by the end of the year could be delayed now.