Why is the Housing Market Treading Water?
Read our round-up of the key reports about the state of the housing market this summer and how much Brexit is tugging at its growth.
There is universal agreement among all the key house price indices that the UK’s housing market is treading water.
This is a strange state of affairs, given that inflation and interest rates are low and employment levels are high, which in normal times might lead to a motoring housing market. And it’s almost all down to Brexit.
Let’s take a closer look.
What Do the Experts Say?
“The interesting thing to see is what will happen in October when, if all goes to plan, we leave the EU,” says TV presenter and Move iQ founder Phil Spencer.
“Will this cleared log jam lead to a surge in activity within the housing market or will people continue to sit on their hands to wait and see what happens to the economy?
“I think we’ll see an uptick in activity and demand for property if we do leave the EU, but there are plenty of other reasons why buyers and sellers are being cautious at the moment including the cost of moving home and a lack of property for sale in the market.”
The Halifax
Halifax’s lending is strongest in the north of England where the property market is showing the most vibrant growth.
It reckons that although Brexit has helped soften the market and reduce price rises across the UK, at least the market is stable. It’s house price index shows values rising by 4.1% year-on-year but dropping marginally over the past three months, or on average by £600 per home. It says the market is unlikely to pick up until Brexit is over.
Nationwide
The Nationwide data has a bias towards the southern half of England and also more expensive homes, which are both the weakest property sectors.
The lender describes the housing market as subdued and that its figures show house prices rising by less than 1% a year as many people delay big-ticket items like home purchases until at least after October 31st. It says one busy sector are first time buyers, who are taking advantage of the weak market to negotiate house prices.
Rightmove
Rightmove only reports asking prices, not sold prices.
It says demand for property has begun to increase during August as some buyers have decided to ‘go for it’ before Brexit happens rather than wait. The number of sales has increased in recent weeks, particularly in the North East, East of England and Yorkshire.
Land Registry
This is claimed to be the most accurate index because it records all house sales in the UK. But it lags behind the others by about a month.
Like the Halifax and Nationwide, the Land Registry says house price growth is running along at under 1% a year but highlights several significant regional variations. These include Wales, where homes are increasing in value by 4.4% a year, and London where they are falling by 2.7%.
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Last Updated: September 22nd, 2024
