UK Economy receives boost as new figures show housing market has grown by 0.5% in July
- Patrick Maflin
Now that the dust has settled and hysteria has subsided, we can take a look at the actualities of what Brexit means for the housing market. In reality, the fears of a housing price crash after the vote to leave the EU have not materialised. House prices are growing steadily; by 0.5% in July according to Nationwide.
In its monthly house price report the Mutual said the average UK property price is now £205,715, having increased by 5.2% over the last 12 months.
These figures are based on the first month following the referendum, although the Mutual was quick to point out that because its data comes from mortgage offers, it is likely to reflect decisions to buy property made beforethe vote.
Robert Gardner, Nationwide’s chief economist, said: “It is important to note that, in constructing the index, we use data at the mortgage offer stage – this means any impact from the vote may not be fully evident in July’s figures, as there is a short lag between a buyer making the decision to purchase a property and applying for a mortgage.”
He added that the housing market outlook was unusually uncertain, but said other factors are at play in addition to Brexit.
“Housing market transactions were always likely to soften over the summer after the surge in activity in March, as buyers brought forward purchases of second homes to avoid the stamp duty levy, which took effect in April,” said Gardner. “Determining how much of any fall-back in activity is the result of the tax changes and how much is due to the referendum will be difficult.”
Ian Thomas, co-founder and director of LendInvest, added: “There is an acute shortage of new housing being built, and with an interest rate cut apparently on the horizon, borrowing will become even cheaper. Demand will continue to outstrip supply.
“The Prime Minister has talked about wanting to ramp up housebuilding, but now we need action. This isn’t an issue that can be kicked into the long grass.”
Commercial property funds could end up benefitting from Britain’s exit from the European Union, as foreign buyers take advantage of the weak pound to snap up British assets, according to the asset manager Henderson. Furthermore the FTSE 250 is up 046pc on the day trading at 17,344- which sees it back above the level it closed at before the Brexit vote was announced on June 23.
All signs point to the fact that the UK ecomony is bouncing back from Brexit and so for those of you who are stalling and waiting to see what will unfold it might be worth revisting the idea of investing in property before the markets gather pace once more. In addition the mortgage rates published this week show that there has never been a better time to borrow with some lenders offering mortgage products at interest rates as low as 1.67%. This is something that we could have only dreamed of pre- 2008.
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