Brexit Blamed For House Price Drop

Figures from property website Rightmove have shown that house prices rose at the lowest rate for the time of year since 2011.

This is in sharp contrast to the traditional rises in house prices usually seen in the UK in spring.

The figures

According to Rightmove’s findings, the average price rise of a newly listed property was up by just 0.4%, which represents a rise of £1,287 month on month.

This was the lowest average monthly rise for the time of year since 2011. Compared to the previous year, the average home price is 0.8% lower, and ‘considerably lower’ than the average 0.9% increase that has occured over the past seven years. The average house price now stands at £302,002.

Regional falls

While nine out of eleven regions saw a rise, the average figure was dragged down by falls in house prices in London and the North East. The capital saw a fall of 1.1%, or £6,625, while the North East experienced a reduction of 1.3%.

However, London prices are still 68% higher than ten years ago, with an average price of £717,930 in inner London, and £607,426 in Greater London. In contrast, the North East has seen price rises of just 8% during that decade.

Sales agreed also fell. In London, they fell 9.6% compared to the same time the previous year. Across the country, the fall was 7% compared to the same period in 2018.

The positives

It’s not all doom and gloom, however. Scotland saw a particularly buoyant period, with prices jumping 3.1% month on month. The North West also enjoyed an impressive increase of 2.2% increase in asking prices.

Wales also saw an above average increase with a rise of 1.4%. The Midlands and Yorkshire are also holding their own.

The impact of Brexit

It is largely believed that uncertainty over Brexit is to blame for the subdued market, with several experts commenting on the situation.

‘Politicians have to realise the continued uncertainty of Brexit will have greater consequences. Extending the deadline, to June or indeed four years cannot be a satisfactory solution for the property market,’ warned Marcus Bradbury-Ross of The London Resolution.

He is far from alone in his opinion.

Andy Solomon, founder and chief executive of software provider Yomdel, said: ‘We expect that this [situation] will continue to be the case with no real signs of life returning to London and the South East until a deal is done and an exit is made. Which is unlikely to be any time in the near future.’

Rightmove also considered Brexit to be a factor in the lowered growth of house prices, while also acknowledging the positive situation elsewhere in the country.

Miles Shipside, Rightmove director and housing market analyst comments: ‘While March marks the start of spring, temperatures have yet to rise in the housing market. Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate. There’s greater resilience the further away you get from the London market, and there’s a sound bedrock of demand for the right property at the right price, reinforced by ongoing housing needs combined with cheap mortgage borrowing.’