House prices continue rise despite referendum uncertainty

The annual price growth in UK residential property in June eased back to its slowest rate in nearly a year, according to the monthly property report from the Halifax.

new build houses in the UK
However, the 1.3 per cent increase in the month still represented a year-on-year rise of 8.4 per cent, pushing up the average home price across Britain to £216,823.Martin Ellis, a housing economist at Halifax, said, "There is evidence that the underlying pace of house growth may be easing. House prices in the three months to June were 1.2 per cent higher than in the previous quarter; down from 1.5 per cent in May."House prices continue to increase, albeit at a slower rate, but this precedes the EU referendum result, therefore it is far too early to determine any impact since."Rob Weaver, director of investments at property crowdfunding platform Property Partner, commented, “Despite all the uncertainty in the lead-up to the EU referendum, June’s data shows prices still stubbornly rising, but at a slower pace. This reinforces the recurring issue of the paucity of residential property and continuing appetite to buy in Britain.“This is a snapshot of the market pre-Brexit, and while the vote to leave has resulted in a political earthquake, the fundamentals in the housing market remain unchanged – people still need a roof over their heads.“There’s been a stand-off between sellers and buyers with transactions dropping off since the stampede in March to beat the stamp duty deadline. But sales should start to pick up in coming months with the weight of uncertainty now partially lifted."Jonathan Hopper, managing director of the buying agents Garrington Property Finders, added, “The Halifax data usually paints the rosiest picture of all Britain’s rival house price indices, and the surprisingly brisk rate of growth it recorded in the weeks before the EU referendum was no exception.“But that pre-referendum market – in which steady price rises were underpinned by limited supply – now feels an age ago. The Brexit result means all bets are off and the market’s psychology has fundamentally shifted. While it’s too early to know how much prices have fallen, sellers are already behaving as if a fall is coming. Many of those who have to sell are starting to offer discounts, often big ones.“In the space of a fortnight the property market has reversed its polarity from a seller's to a buyer’s market. This Halifax data is likely to represent the high water mark for prices this year, but now serves as little more than a historical record of the rising market’s last hurrah.”Mark Posniak, managing director of Dragonfly Property Finance, said, "The June uptick in prices was a surprise but on a quarterly and annual basis there has been a moderation in price growth, and this is a much better reflection of where the market is at."Few will pay much attention to the June price rise. What matters is where the market goes from July onwards and that's the great unknown."Ben Madden, managing director of London estate agents Thorgills, agreed that the June figures "can be taken with a pinch of salt" because the data was gathered before the outcome of the referendum."While the vote to leave the EU came as a shock, the mere fact that we had a result was as if a weight had been lifted and people started to make firm buying decisions again," he said. "In the week after the referendum result, there was an immediate uplift in new sales instructions and an increase in buyer registrations."Despite widespread predictions that sales activity would drop off and sellers would have to accept price reductions, that simply hasn't materialised."What we anticipate is a reduction in window shoppers – those less motivated buyers with lists of property requirements as long as your arm, that inevitably decide to stay put. But we are seeing strong signs that committed buyers and sellers are now carrying on with their lives. The prospect of a cut in interest rates is providing a further incentive."

 

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