House prices hold steady year af­ter Brexit

Sup­ply short­age means no so­lace for first-time buy­ers Low un­em­ploy­ment and rates boost ac­tiv­ity lev­els

The Guardian - - FINANCIAL - Si­mon Good­ley

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’

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