Buyers, owners and landlords grapple with Brexit
Dominating the news headlines around the globe was the shock result in the UK referendum on European Union membership on 23rd June, with Britain voting by a margin of almost 1.7 million to withdraw from the EU. This was contrary to what pollsters, bookmakers and the markets expected, and caused the pound to tumble overnight and wiped trillions off stocks and shares globally. Understandably homeowners and buyers are very concerned how this could affect house prices and consumer confidence, though since the result both sterling and the FTSE have recovered to some degree.
In the face of such uncertainty the number of homes coming to market may fall, but prices should remain reasonably stable as long as demand is sustained. It is also to be expected that interest rates will stay low for the foreseeable future, indeed Bank of England Governor Mark Carney signalled they are likely to be cut as early as July – good news for mortgaged buyers and owners.
With the pound at historic lows prime central London property will be more attractive to overseas buyers, while uncertainty about the future strategy of large global employers may lead to a short-term boost to certain London lettings markets as workers from overseas choose to rent rather than commit to buying a home.
New single index to track house prices
A new official house price index, called the UK HPI, launched in June, replacing the Land Registry and ONS indices. In addition to average prices, the index shows prices by property status (new-build and existing properties), buyer type (first-time buyers and home movers) and purchase method (cash and mortgaged). The latest results, from April 2016, show an average UK price of £209,054 (12-month growth of 8.2%) and London average of £470,025 (12-month growth of 14.5%).