UK house prices increased by 2.8 per cent in the 12 months to February 2019, bringing the average to £236,800, according to recent data from Halifax.
Month on month prices were up 5.9 per cent while quarterly prices were up by 1.8 per cent, suggesting a steady start to the year despite Brexit being less than a month away, according to the recent data from Halifax.
Russell Galley, managing director at Halifax, pointed out that house prices have grown on an annual, quarterly and monthly basis for the first time since October 2018. He says this growth is supported by shortage of supply.
He also pointed out that while annual house price growth is at 2.8 per cent, it is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3 per cent.
Galley commented: “People are still facing challenges in raising a deposit, which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”
A ‘wait and see’ approach
According to Dilpreet Bhagrath, mortgage expert at Trussle, despite relatively positive figures, it is not so good that home owners seem reluctant to move, with many adopting a ‘wait and see’ approach to see how any Brexit deal might affect the market.
Bhagrath commented: “Buyers, particularly those looking to get on the ladder for the first time, shouldn’t be put off by rising prices. There are still good offers to be had in some areas of the country. Potential buyers who are concerned about the economic impact of Brexit should also be considering their own current and future circumstances when it comes to mortgaging. Opting for a fixed-rate mortgage may give provide more stability, as they’ll know how much their payments are each month.”
Heavy turbulence, no matter what
No matter what happens, Brexit will be the test for the housing market, according to Sam Mitchell, chief executive officer of online estate agents Housesimple. “Even with an acceptable exit deal in place, house prices are likely to face some heavy turbulence. But it’s nothing the property market can’t take in its stride,” he said.
“We can’t say with any degree of certainty how buyers and sellers are going to respond over the coming weeks, especially if a no-deal becomes the most likely outcome. There’s some evidence to suggest that sellers and buyers have already decided to wait, particularly in and around London,” he explained.
Mitchell also pointed out that sales activity in the North West of England and Yorkshire alone is strong and there could still be a post-Brexit bounce. “Far too much has been made of stalling price growth in the capital and the part Brexit has played, when in fact London was already showing signs of running out of steam well before politicians started squabbling around the Brexit table. The danger is that stuttering house price growth in London sets the tone for the whole country,” he commented.
He also explained that the strength of regional property markets in the North, buoyed by strong first time buyer and investor numbers, is an encouraging sign that the performance of the UK’s housing market is not determined by what’s happening within the M25.