This month property expert David Leake of Housesetc discusses the effect of Brexit on the housing market.
Data released by the Land Registry shows that the average price of a property in the UK is now £218,964 after a sizeable increase of 8.4% over the past year – in August alone the average property price rose 1.3%.
A growth of 13.3% was recorded in the East of England with 12.2% in the south east and 12.1% in Greater London. However, some experts are beginning to warn of Brexit-inspired trouble for the housing market leading to low or negative price growth in 2017.
The pound’s recent weakness provides a timely reminder that challenges lie ahead. As inflation returns over the winter it will squeeze household incomes and spending. The pressure on consumers and the cautious approach to spending by businesses mean that the UK is facing a period of relatively low growth.
Meanwhile, Brexit has caused a great deal of uncertainty in the market and this uncertainty can be seen in the fall-through rates – 31 per cent of residential sales fell through before completion in the third quarter of 2016. Almost half of these were because buyers changed their mind which reflects the anxiety present in the market.
Other reasons cited for house sales falling through include; a seller negotiating a better offer from another buyer, survey issues, difficulties securing finance, and buyer or seller pulling out because they felt the sale was progressing too slowly.
With Theresa May announcing that Article 50 will be triggered by the end of March 2017 signalling the commencement of Brexit, it is likely that the housing market looks set to have more uncertainty to contend with.