The UK’s property market is, according to the most recent Halifax House Price index published for the three months up until the end of April, defying Brexit uncertainty. The index showed average house prices 5% up on the same three months a year earlier and up 1.1% over April. A 1.6% drop had been forecast to follow on from the 1.3% decline over March. The average UK-wide sales price was £236,619.
The 5% rate of growth over February, March and April represented the highest in over 2 years with February 2017 the last time it was bettered. However, Halifax did highlight that the unexpectedly high growth rate was based on a couple of extenuating circumstances. Firstly, growth over the same period in 2018 had been particularly sluggish and February saw a rush of more expensive newly-built homes in the London area come to market and sell.
Property market experts, including Halifax analysts, were quick to point out that the surge back to strong house price growth over the quarter shouldn’t be taken as an indication that consistent price rises are back. Russell Galley, Halifax’s managing director noted that both supply and demand volumes are low compared to previous years and that the broader year-on-year trend was still one of weaker growth.
Other measures of the strength of the market such as data from the Royal Institute of Chartered Surveyors and Bank of England and HMRC figures all indicate a generally weakening market. Pantheon Economics’ Samuel Tombs, as quoted in The Times newspaper, stated that the price growth surge cannot be reconciled with wider evidence from the housing market and represents shorter term volatility rather than anything else more positive.
The extension of Brexit uncertainty until October is expected to subdue housing market activity over the interim period. Jeremy Leaf, former residential chairman for Rics and now an estate agent in north London, commented:
“The market is quite volatile, bearing in mind the fall in prices last month. The price increases recorded are probably more to do with shortages of stock and lower transactions than sustainable market strength.”