As a Morley property owner myself I have been following the property market even closer than normal following the UK’s decision to leave the EU and have been looking at trends and predictions across the UK market. There has been a lot of reports of a fall in house prices, particularly in London, but also across the rest of the UK. It’s something I’m currently getting asked about a lot, so I thought I’d look at what’s happened to Morley property prices in the last month more closely.
At first glance it seems that what’s being reported in the media is proving to be true in Morley too, with overall average asking prices down by 6% from £184,089 in June 2016 to £172,221 in July 2016. But before we get carried away with a negative effect of Brexit on our prized possession, let’s first remember that bad news sells newspapers and look at the wider picture. From May 2016 to June 2016 average asking prices in Morley increased by a massive 10% from £167,614 to £184,089. That means that July 2016 average asking prices are actually 3% higher than pre-Brexit May 2016! Of course that could be a blip, but when looking year on year from July 2015 to July 2016 it seems not, as average asking prices are 9% higher up from £157,439. It does seem that June 2016 did see a big increase in asking prices being up 18% on June 2015, but as May 2015 to May 2016 saw a more modest increase of 7% it’s more likely that either June was a blip or that in reality the vote to leave has slowed the rate of growth in asking prices, but they are still increasing overall.
Buyer enquiries down 16% in the two weeks post Brexit
There have also been reports of lower buyer enquiries to estate agents, down by 16% in the two weeks post Brexit compared to the same period 2015. If this were to continue then lower numbers of buyers could apply downward pressure to house prices as sellers reduce asking prices in order to compete in attracting buyers. However, 2015 buyer enquiries were boosted by the surprise general election and Rightmove indicates that 2014 is a more comparable benchmark and enquiries post Brexit are consistent with that period.
July typically marks the beginning of the annual summer slowdown in the property market and therefore what is a normal annual cycle should not be confused with Brexit effects.
Ultimately the UK still has a housing crisis with demand outstripping supply and as I have said before, even taking immigration out of the mix and an ageing population, increasing birth rate and increase in the number of single person households will still continue to put upwards pressure on this. There may be a short term impact of the vote to leave, with fewer transactions due to cautiousness amid uncertainty. But as long as the banks continue lending and mortgage rates remain attractive, (which they are certain to do if interest rates stay the same or are even cut as is predicted by some), then appetite for property purchases should remain stable and the property prices should maintain their current levels.