Cottage in Yorkshire, where property prices are increasing
Whilst parts of the UK are currently expecting a downturn in the wake of Brexit uncertainty, the Land Registry data, which is based on completed transactions, provides evidence that some parts of the country are still seeing a positive environment for sellers and buyers.
The East Midlands, North East and Yorkshire and the Humber are all seeing prices increase modestly month on month by 1.5, 1.4 and 1.2 per cent respectively.
However, true to recent form, prices in the capital and its commuter-belt of the South East, together with the South West all saw property values fall over the same period by anywhere up to 0.5 per cent.
According to the Land Registry data, the average UK property value is now £232,797 with prices seeing an average rise of 3.2 per cent.
Although the figures are slightly historic, they do underpin what has been observed by other house price indices previously, and as such are considered by many industry professionals as a reliable benchmark in terms of values.
But is Brexit really having that much of an impact on housing market activity? The answer is that clearly, it depends where you are in the country.
In London and the surrounding areas, there is definitely sensitivity due to the ongoing negotiations around the UK’s divorce from the rest of Europe, mainly linked to employment where jobs may be at risk, depending on what deal is agreed. Here, the market is stagnating due to lack of confidence and activity.
PM May and Jean-Claude Juncker: Brexit is just over five months away
However, in areas where jobs are based more on the local economy and therefore not as much impacted by the outcome of Brexit negotiations, prices are increasing and transaction numbers remain solid.
As Nick Leeming, Chairman of estate agents Jackson-Stops, commented: “It is positive to see the East and West Midlands once again reporting strong annual house price growth, demonstrating greater levels of confidence in the face of our impending exit from the EU.
“London experienced a slight dip in prices both on the month and the year, but given we are in the midst of an uncertain and politically challenging time, this is hardly surprising.”
Nick continued: “Now Brexit is just over five months away, it will be interesting to see what is addressed in Philip Hammond’s Budget statement at the end of the month.”
Mike Scott, chief property analyst at online estate agents Yopa, also expects the currently observed trends to continue into next year.
He suggested we will see: “Continued house price growth led by the Northern and Western regions, while London and the Southern and Eastern regions of England will stagnate or even fall back a little.”
Average UK property value is now £232,797 with prices seeing an average rise of 3.2 per cent
Mike added: “However, growth rates since the 2008 credit crunch are still far higher in the South East than in the rest of the country, and the North and West will have to grow at a faster rate for some time if they are to catch up to the same relative position as ten years ago.”
But is house price growth really relevant to those who, for the foreseeable future at least, are staying put?
According to Brian Murphy, Head of Lending for Mortgage Advice Bureau an increase in prices can be helpful, as he explained: “Whilst it’s easy to dismiss house prices as not particularly relevant unless you’re moving home, the reality is the better rates on remortgage deals are reserved for those with more equity in their property.
Philip Hammond is to announce his budget statement in a few weeks
“Therefore, those who are perhaps currently taking a more cautious approach and have decided to stay in their current home for the moment, may find that if the value of their property has increased, they are able to access cheaper remortgage rates as a result.”
Many lenders have held their rates at competitive levels since the Bank of England raised interest rates over two months ago, possibly as a way to tempt new customers on to the books before the end of this year.
With the possibility of a breakthrough in Theresa May’s dialogue with her European counterparts over the next couple of days, should a deal be announced we may yet see a late Autumn bounce as the positive impacts of a known outcome kick-start the market, due to the pent-up demand we’ve seen over the last few months.