How Brexit Has Impacted UK House Prices

Despite claims by the Bank of England that a worst case scenario after exiting the EU could see house prices fall by 35pc over three years, research by estate agent Keller Williams UK has found this to be far from the truth.

While it is arguable that the worst case scenario has been avoided, Brexit still caused years of uncertainty and defeated two prime ministers. Yet despite the continuing debate and the disruption it unleashed, UK house prices have risen by 14.1pc since the vote in June 2016.

Price rises before and after Brexit

At a regional level, growth has been driven by Wales and the Midlands. The East Midlands, in particular, has witnessed the largest increase in house prices at 20.9pc since the Brexit vote, while property values in the West Midlands have risen by 19pc. Wales has seen an increase of 20.3pc since June 2016.

Only London, the North East and South East failed to make double digit price growth. The capital saw the biggest slowdown, achieving a very modest increase of just 3.2pc, whereas house prices rose by 6.7pc in the North East and by 9.2pc in the South East.

However, it is important to point out that while house prices have continued to climb since the EU referendum, the rate of house price inflation has slowed. Keller Williams UK has compared the rate of growth since the Brexit vote to the same period before the vote.

The findings show that while house prices increased across the UK by 28.3pc during the four years before the vote, they have grown by only 14.1pc since June 2016.

Yet one third of UK regions, Wales, Yorkshire and the Humber, the North West and Scotland, have seen the rate of house price growth since the vote exceed that of the same period preceding it. London saw the largest slowdown in the rate of house price growth since the vote, whereas it leapt by 61.2pc in the same period pre-2016.

Leave vs remain

When the referendum took place in 2016, property prices in remain-voting areas averaged £302,688. They have increased by 8.1pc to an average of £327,316 since then. By contrast, house prices in leave-voting areas have jumped by 14.1pc to an average of £232,976 now.

Only two of the top 10 areas for house price growth since the referendum voted to remain. Newport, which voted to leave, saw the largest increase at 31.7pc. Monmouthshire experienced the greatest increase, 30.5pc, of all remain areas, the second largest in the UK. Leicester, with an increase of 28.2pc, is the only other remain-voting area to feature in the top 10.

On the other hand, only three of the 10 areas for the lowest house price growth since the referendum voted to leave: Bracknell Forest (-4.7pc); Hartlepool (-1.3pc); and Spelthorne (-1pc).

Aberdeen (-23pc); the City of London (-20.9pc); and the City of Westminster (-9.3pc), all remain-voting areas, showed the greatest falls in property prices since 2016.

House price growth has slowed

Ben Taylor, CEO of Keller Williams UK, commented that regardless of whether people voted to leave or remain, purely from a property perspective it could be argued that Brexit provided the perfect pick-me-up for the UK property market.

Although a small number of areas have seen prices fall since the vote, he added, the vast majority of the UK has seen the value of property continue to appreciate despite the upheaval that Brexit created.

Even so, the rate of house price growth since the vote has slowed in 69pc of areas, he stated. But this won’t have solved the underlying issue of affordability faced by many who try to get a foot on the housing ladder.

Nevertheless, he believes, at least it means that home buyers are paying less than they would otherwise, while home owners have seen an increase in the value of their investment.

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