Confidence returns to the market after referendum uncertainty


22/07/2016

July Monitor.jpg
  • UK house prices remain stable, down by just 0.2% on the month in June to sit at an average of £235,347
  • London house prices drop 1.3% on the month and rise just 3.7% annually, less than half the annual growth rate seen in the rest of the UK
  • Valuations have risen since the Brexit vote, up 10% the weekend after the referendum compared to the final week in June a year previously
  • UK transactions fall 28.6% on the month and 25.1% on the year in June

Paul Smith, CEO of haart, the UK’s largest independent estate agent comments:

“Following the uncertainty in the lead up to the EU referendum, confidence is now returning to the property market. We saw transactions fall 29% on the month in June which is the biggest decline on record. We have also experienced quite a dramatic drop in the number of new buyers, down 7% on the month and 16% on the year. However, since the outcome of the referendum was revealed, we are already seeing the tide begin to turn.

“While there is still a level of uncertainty due to the Brexit vote, I don’t believe this to be a long term trend as the effect of the vote hasn’t been as great as we anticipated. We are seeing sales begin to pick up once more as opportunist buyers take advantage of the situation by snapping up bargains caused by the uncertainty. Valuations have actually increased in the last couple of weeks as vendors look to get a professional opinion on the value of their home to understand what effect there has been.”

National trends

House prices fell 0.2% on the month in June, pushing down annual house price growth for the UK to just 8.1%. The average UK house price now sits at £235,347.

New buyer demand for homes fell 6.8% on the month and 15.5% annually across the UK. Meanwhile, the supply of properties coming onto the market is down 2.3% on the month and 3.2% on the year.There has been a small decline on the month in the number of buyers per new instruction, however there are still ten buyers for every new property to come onto the market across the UK.

Sales saw a steep drop in June, down 28.6% on the month, causing transactions to fall 25.1% annually.  Buyer viewings declined 4.9% on the month and 10.6% on the year.

First-time buyer house prices fell 1.1% on the month in June to an average of £173,520. This comes as demand for starter homes fell 2.3% on the month and 16.4% on the year. Despite this, first-time buyers made up 47.1% of mortgages written in June, up significantly from 42.7% a year previously.

While the average price for a first-time buyer home has decreased, the average deposit has in fact risen, up by 1.3% on the month and 11.5% on the year. This has brought the average loan-to-value down by 0.6% on the month and 1.7% annually.

The average property price in London has decreased 1.3% on the month and has increased just 3.7% on the year, less than half the rate of growth seen in the rest of the UK. 

Demand for properties in London has fallen 2.3% on the month and 16.4% on the year. At the same time, the number of homes for sale has fallen 4% on the month and 2.3% annually. Sales transactions have seen a significant fall of 22.3% in the last month alone while they have dropped 23.9% on an annual basis.