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18 July 2016
Brexit Means Brexit
The UK property market remains strong, as the demand-supply imbalance is still omnipresent following the EU Referendum result in June this year.
The UK has seen property asking prices take their annual summer lull, in line with the 2014 dip and as expected by agents with significant levels of experience. Seeing the dip similar to the curve observed during 2014 allows for more than a glimmer of positivity after what was reportedly expected post Referendum decline. It is believed that with the fundamentals of the market remaining the same since the 23rd June result, the underlying demand for good quality properties should overcome most uncertainties.
As long as major lenders maintain the offering of attractive deals on mortgages and mortgage rates, the effect on banks and mortgage lending should also be limited.
The appeal of property in the UK, despite initial uncertainty after the vote to leave the European Union, remains robust. House prices declined 0.9% this month, a drop only marginally higher than the average for the summer over the past 6 years. 2015’s figures, boosted by the result of the General Election saw swarms of buyers in the market place. Buyer demand is, as predicted, lower than these 2015 figures but also at a comparable level to the 2014 volumes. The 2014 results were also amid supply constraints and low mortgage rates according to new research by Rightmove.
Director of Rightmove, Miles Shipside stated the “While confidence has been unsettled, the governmental instability in the few days after the Referendum now seems to be being addressed far more quickly than was originally imagined.
“This is not a new credit crunch and the effect on the banks and mortgage lending should be limited. As long s lenders keep mortgage deals attractive and available, the underlying demand for home ownership should overcome most uncertainties.”
Sellers traditionally price more conservatively over the summer months, with average prices in July falling 0.4% on the previous month. Conversely, if the indications of new Prime Minister, Theresa May, scales back fiscal austerity to aid the economy in an attempt to help meet the growing demand, homebuilding could get a significant boost.