Brexit Boom – How house prices have risen despite economic uncertainty

It’s been a hot topic for homeowners, prospective buyers and investors ever since the shock referendum result last year. Now, one year on from the decision to leave, what impact has Brexit really had on the UK property market?

Considering the recent and ongoing political uncertainty, it appears that the UK economy may in fact be far more resilient than anticipated…

Property advice website, Buy Association, described the impact of the Brexit vote as “hardly noticeable” when it came to the property market, and it is believed that it will remain this way after Brexit. (1)

The growing gap between supply and demand would appear to be one factor that has made Brexit seem less important. Estimates suggest that the Government must build 300,000 homes each year in England to help solve the housing crisis – that’s 50% more than the current target, and a figure that we’re currently very far from reaching. (2)

Miles Shipside, Rightmove Director and housing market analyst, said: “Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45%, have sold signs across them.” (3) In fact, it appears that buyer demand is now at a five year high, according to estate agent Strutt & Parker. (4)

With more buyers and sellers in the wider market compared with the period around the referendum last year, the number of sales agreed increased by 4.6% in June 2017 compared with June 2016, according to the latest survey by Rightmove. (5)

If we take a look at house prices, in July 2017, the average house price reached £211,671 – a new record for Nationwide Building Society’s index and prices are predicted to continue to grow by around 2% across 2017. (6)

However, the affects of Brexit (and the stamp duty changes introduced only two months prior to the referendum) are reported to have been felt in prime central London. Although transaction levels across all price bands are up on this time last year, the values being achieved in the capital are reported to be lower than they have been. It is however worth noting that London house prices are currently 55.8% above the 2007 peak. (4)

Whilst there has been a recent reported decline in property prices in London, the Barclays 2017 UK Property Predictor (7) suggests that we should expect property prices to rise by 6.1% in the next five years, meaning the average property value would be £300,000 by 2021.

So, despite the gloomy predictions, the UK housing market seems to have shrugged off concerns of a Brexit slowdown. It is even possible that triggering Article 50 may have been the first step towards certainty after almost nine months of not knowing what will happen next. Whilst the next two years may involve some hard negotiations and tough decisions at the top, the outlook for Britain’s property market is certainly looking positive.

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