House prices bounce back from Brexit vote ‘jitters’

DESPITE dire warnings from Remain campaigners that Brexit would make house prices collapse, the housing market has bounced back from its ‘post-referendum jitters’, experts said yesterday.

Reports out today show a dramatic jump in mortgage lending and buyer confidence.

Last night, one MP said the upbeat findings undermined ‘ridiculous’ predictions that ‘the sky would fall in after the Brexit vote’.

Banks lent £12.2billion to homebuyers in August, up 14 per cent from July, when there was a lull in mortgage lending following the EU referendum in June.

First-time buyers borrowed £5.1billion, up 13 per cent from July, and 24 per cent higher than August last year. More homeowners remort- gaged their homes in August than in any month since July 2009, with 34,200 loans issued.

Paul Smee, director general of the Council of Mortgage Lenders, which published the figures, said: ‘House purchase activity bounced back from a dip in July, reflecting resilience in first time buyer activity.’

He said record cheap mortgage deals, fuelled by the Bank of England’s decision to cut interest rates to fresh lows in August, should ‘underpin a continuing strong appetite for homeownership over the coming months’.

The positive prognosis was echoed by the Royal Institute of Chartered Surveyors, which had previously warned that a Brexit vote could paralyse the housing market.

Its report, out today, says: ‘Prices are starting to rise again as... buyer interest starts to return. Homebuyer demand is beginning to pick up across the UK for the first time since February.’

The number of chartered surveyors reporting an increase in inquiries from buyers is now 8 per cent more than those reporting a fall – a ‘significant turnaround’ from June, when 34 per cent more members reported a drop in inquiries.

The RICS said the stock of homes for sale was ‘close to historic lows’, which was pushing up house prices.

Some 17 per cent more surveyors reported a rise in prices in September, and the RICS expects prices to continue to edge up.

Chief economist Simon Rubinsohn said: ‘The market does not appear to be settling down following the significant headwinds through the spring and summer.

‘Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.’

A third report published by Halifax claims house prices had their first quarterly fall in four years – down 0.5 per cent to an average of £214,140 in the three months to September 30.

But Halifax said the ‘ pace of decline was only marginal and much slower’ than during the financial crisis, when prices slumped 5.6 per cent in the third quarter of 2008.

Chris Williamson, chief business economist at IHS Markit, which provided the figures, said optimism among homeowners about house prices has ‘rallied’ since the vote.

UKIP MP Douglas Carswell said: ‘What a surprise. Even after voting for Brexit people will still want to buy and live in houses.

‘The idea that being an independent self-governing country would cause the sky to fall down and the housing market to crash was always ridiculous. These reports are a welcome return to reality.’

‘Welcome return to reality’