Rising House Prices In A Post-Brexit World
The Law Of... looking beyond the headlinesBoth the Daily Mail and the Daily Express have featured stories on the rise of house prices in the wake of the EU referendum. But are house prices really rising, or are there other factors at play?
Mark Underhill, National Operational Accounts Manager for conveyancing
, takes a look at the statistics to get to the truth behind the headlines.
Unexpected House Prices
Though many expected house prices to plummet, it would appear the opposite is happening and house prices are actually on the rise. At least, that's the case if reports in the Daily Mail and the Daily Express are to be believed.'EU exit boosts house prices'
proclaimed the Express, while the Mail goes with the less wieldy 'House prices in Britain's largest cities see double digit growth despite Brexit uncertainty'
Quoting property market analysts, Hometrack, the reports go on to say that in June house prices in the UK's major cities were 10.2%
higher than a year previously. This was particularly the case in the North, where Manchester, Leeds and Liverpool were all shown to be forging ahead.
The Truth Behind the Headlines
However, if you look beyond the headlines, a different picture begins to emerge - the figure for June is actually the same as it was for May. This was despite steady growth in the preceding months, partially triggered by the rise in stamp duty for buy-to-let investors
. This increase was due to a surge in sales as landlords bought up property before the changes took effect on April 1st.
The knock on effect of this upswing in demand would still have been felt in the run up to the referendum, with house prices reflecting this.
Will Brexit Affect the Price of my House?
Despite claims from experts on both sides of the divide, it is too early to make substantiated claims about property prices. Mark Underhill explains:"Despite 'journalistic objectivity' being one of the key principles of the industry, newspapers have their own agendas. In this instance it is to cheerlead the cause they backed and to reassure the readership, who may well share their view, that they were right to do so.""It is too early in the day to make any informed assessments of how the referendum result will affect the housing market, as everything is still up in the air. The figures quoted are for June, but the vote wasn't until the 23rd, which means this is no way an indication of a post-Brexit 'boost'. In fact, during the run up to the referendum it was widely assumed that Britain would vote to remain, which may well account for a tentative – in that the numbers plateaued but didn't fall – business as usual approach.""One month on, Brexit has yet to happen, so everything is pure conjecture. Only when it does will we be able to get a firm handle on what a post-Brexit housing market looks like."