In the month following the EU referendum, house prices in the UK went up by 0.5% compared to the previous month, while the annual rate of house price growth remained almost unchanged at 5.2%, compared with 5.1% in June, the latest house price data has revealed.
However, Nationwide’s House Price Index for July uses data at the mortgage offer stage, which means buyers may have made the decision to buy before the Brexit vote, so its impact is not clear.
Robert Gardner, Nationwide’s chief economist, says: “It will be tempting for commentators to assign any trends in the coming months to the impact of the referendum. 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. Determining how much of any fallback in activity is the result of the tax changes and how much is due to the referendum will be difficult.”
He suggests that in these times of economic uncertainty, it’s hard to predict the impact on the housing market, suggesting that would-be sellers hold off from putting their property on the market, pointing out that estate agents have the lowest levels of properties on their books for 30 years.
“The outlook for the housing market remains unusually uncertain and it may take several months for the underlying trends in the market to become evident,” he adds.
Commenting on Nationwide’s report, Rob Weaver, director of investments at property crowdfunding platform Property Partner, says: “It’s difficult to read too much into this uptick in July, but positive growth can be seen as proof of the residential property market’s underlying strength in uncertain times.
“No one really knows what the full impact of Brexit will be on the economy but while more volatile assets such as stocks and shares fluctuate and falter, investors in UK residential continue to earn a stable, positive return.
“It’s still up in the air whether it was the rush to beat the stamp duty deadline in March or the EU referendum that’s led to the drop off in transactions in subsequent months.
“But if the past is any indicator of the future, there’s still no concrete evidence to imply this broad, continuing upward trend in house prices will change any time soon.”
‘Estate agents’ stock levels have rarely been so low’
Jonathan Hopper, managing director of buying agent Garrington Property Finders, adds: "For the time being at least, grim predictions of a sharp fall in house prices simply haven't materialised. The sheer lack of supply is helping to prop prices up. Estate agents' stock levels have rarely been so low.
"Yes, the pendulum has swung largely in favour of the buyer since Brexit, but it's by no means a black and white market. Certain properties are still making it to best and final offers, with the seller holding all the cards.
"Many sellers have started to take the medicine and are lowering their frankly unrealistic asking prices to reflect current market conditions.
"The penny is dropping that if you sell at a lower price, you can generally buy at a lower price, too.
"Other sellers, however, are refusing to budge and are in a Mexican standoff with would-be buyers. The gap between what they are prepared to sell at and what the buyer is prepared to offer is widening.”