There is much understandable anxiety about how Brexit might impact the UK housing market. Any large-scale political and economic change has the potential to adversely affect things, but recent conflicting reports show that the market might not be in such a precarious position after all.
On one hand, new numbers from HMRC show that residential property transactions fell considerably in July. In total, just 88,630 transactions were completed in July, representing a monthly fall of 8.5% and a yearly fall of 12.4%. When adjusted seasonally, the number of transactions in July 2019 was lower than at any point in the last year.
However, the fall in residential transactions does not tell the whole story, and it should be noted that other parts of the market are performing far better. For instance, the National House Building Council has reported 43,438 new homes were registered between April and June 2019. This is a 12% annual rise and the highest number since the end of 2007 – right before the banks destroyed the global economy.
The latest data from Rightmove backs up that more positive outlook. The property portal reports that a summer spending spree appears to be underway, with the average price of a property brought to market increasing by 1.2% year-on-year, and the total number of sales increasing by 6.1% over the same period.
This increase in asking prices and sales occurred across all market sectors – first-time buyers, second-steppers and ‘top of the ladder’ premium prices – and across all regions of the country, from the North East to the South West.
Miles Shipside, director and housing market analyst at Rightmove, said: “Surprisingly, there seems to be a bit of a summer buying spree, despite it normally being a quieter time of year.
“For some reason more buyers have cottoned on to the fact that it can be a good time of year to buy, with less competition from other buyers, and sellers typically more willing to accept a lower price.”
Jeremy Leaf, former residential chairman at the Royal Institution of Chartered Surveyors, agrees, saying:
“Although based on asking prices, the Rightmove numbers always prove a useful and more up-to-date indicator of market strengths than some other surveys, with the sales agreed numbers always particularly interesting.
“The figures confirm what we are seeing at the coalface — while caution and uncertainty remain in some quarters, demand cannot remain pent-up indefinitely.
“Buyers are looking beyond Brexit and taking advantage of improving affordability, softening prices and greater realism among sellers.”
Overall, the market seems to be in fairly good shape, and a history of strong growth will help it shake off any short term effects. Buy to let landlords in particular should not be overly worried. Demand for homes in the Private Rented Sector is increasing, and so too are rental yields. Crucially, the conditions which allow for this growth are unlikely to change significantly in the foreseeable future
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