House prices hold steady year after Brexit
Supply shortage means no solace for first-time buyers Low unemployment and rates boost activity levels
The UK housing market is shrugging off concerns in the wider economy following the Brexit vote, compounding problems for many first-time buyers still wrestling with the strongest year-on-year price rises in the market.
There are more buyers and sellers in the wider market compared with the period around the EU referendum a year ago, with the number of sales agreed up by 4.6% in June 2017 compared with June 2016, the latest survey by Rightmove found.
The property website added that prospective buyers were “seeing a lot of sold boards on properties they would like to buy themselves” – with more than 45% of estate agents’ stock now marked as sold.
Cumulative sales agreed during 2017 are virtually on a par with the same period in 2016 – down by just 0.4% – even though the first six months of last year were boosted by the rush to beat the April 2016 stamp duty deadline, the survey added.
Miles Shipside, a director at Rightmove, said: “A year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong. Low unemployment, low interest rates, strong demand and historic under-supply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45%, have sold signs slapped across them.”
The monthly survey, which is calculated on asking prices rather than completed transactions, comes at a time of year when the property market is typically quiet, as buyers and sellers take a break from the spring selling season and households concentrate more on holidays than house buying.
The seasonal slowdown in activity had caused the overall market to rise by just 0.1% on last month, Rightmove said, but while that includes a drop in prices for first-time buyers outside London since June, the blip in the market at this time of year has provided little solace for embattled first-time buyers.
The data shows that the national average asking price for people buying their first home has dropped by 1.7% since last month to £196,450, but that figure is still 3.8% higher than a year ago, while the first-time buyer sector of the market is the highest riser during 2017 overall.
Still, Rightmove cautioned that in spite of high demand and a lack of supply, stretched affordability continued to act as a brake on prices.
While all regions have seen year-onyear price rises, the national average stood at a “relatively subdued” increase of 2.8% to £316,421 over the year, the company reported.
The warnings about supply reflect a survey from the Royal Institution of Chartered Surveyors (Rics) last week, which showed that the average number of properties available per estate agency branch had fallen to an all-time low in June, at just over 42.
Brian Murphy, head of lending for Mortgage Advice Bureau, a financial adviser, added: “The average time to sell, standing at 60 days in this month’s [Rightmove] report, has remained broadly unchanged now for the last quarter, and also points to market consistency in most areas that again flies in the face of some who might suggest that the market is in negative territory.
“Quite to the contrary, all of these indicators would point to a calm, steady and functioning UK market, with perhaps those consumers who did decide to ‘wait and see’ in the lead-up the election now deciding to simply get on with their move, adding yet more motivated movers into the mix in most parts of the UK.”
The West Midlands has experienced the greatest price rises in England and Wales during 2017, according to Rightmove, with prices 6.1% higher than last year. The east Midlands has been the next best performer, with price growth of 4.9%, followed by Yorkshire and the Humber on 4.1%. Greater London has had the weakest growth of the regions outside central London over the past 12 months, at 0.9%, followed by the north-east with 1.6%.
‘Consistency in most areas flies in the face of those saying prices are in negative territory’