Has the Brexit vote affected the property market?
Bouncing back from the Brexit summer, house price growth is relatively robust, according to the Financial Times. Although house price growth dropped to a three-year low in July of this year, following the UK’s vote to leave the EU (Royal Institute of Chartered Surveyors), new data shows the property market is now growing.
Back in July, economic uncertainty unleashed by the Brexit vote did cause the housing market to stall and property prices to crash. London house prices fell by 2.6% between July and August, with prices of properties up for sale down by £16,301, according to Right move’s August House Price Index. The number of homes changing hands slumped, inquiries from buyers fell and the supply of properties coming on to the market fell in every region except Northern Ireland (Rics). Equally, the UK commercial property market was hit, as investment sank to its lowest level in four years during the quarter after the Brexit vote, with the City of London and Scotland suffering worst, as cautious investors retreated from the sector. According to the first comprehensive post-referendum data, some £8.7bn was invested into property from July to September, while the average deal size shrank to £13.6m – its lowest since the depths of the financial crisis in 2009 (The Guardian).
However, it seems the coin has flipped with England leading the way among the UK countries, as house prices are surging 9.2% to £236,000. Right move reported asking prices have increased 0.7 per cent month-on-month. Yet, while it may be good news for sellers, for aspirational first time buyers it only seems bad news as prices grow to unreachable heights. Therefore, the need for the government to prioritise boosting the supply of affordable homes has become a necessity. Yet Nationwide’s Chief Economist, Robert Gardner, suggests his position on the housing market is cloudy. He believes what happens on the demand side is determined by the outlook for the labour market and confidence among prospective buyers. However, others feel more positive as continued increase in prices is due to the slowdown in both buyer demand and housing supply, which has actually kept everything finely balanced. According to Rightmove, though, the south is a buyer’s market with 16% more homes for sale than last year.
The biggest change in recent months has been the shift in the stamp duty regime, which should help homebuyers. The greatest savings come for those buying homes for up to £100,000 more than the £250,000 and £500,000 thresholds.
Whatever the economic circumstances, Devon and the southwest remains a wonderful place to live. As an independent firm, we here at Autograph Estate Agents are highly empathetic to the needs of a multifaceted community from buying and selling to renting, and as a local firm we understand the local markets. All in all, Brexit has caused significant disruption but currently the future for the property market looks relatively bright.