Brexit is beginning to resemble Groundhog Day, the same arguments going round and round with no sign of a resolution or any kind of compromise that might break the cycle.
There is, however, evidence that house buyers are increasingly fed up with the ongoing uncertainty and getting on with their house moves, especially now that the Brexit deadline has been extended to the autumn.
Asking prices have risen across the board – up by 1.1% in April – the largest monthly rise for any month since 2016. The increase in activity is most marked in the family sector – 3 and 4 bed homes. Home moves in this sector are mostly driven by growing families or the need to be in the catchment area of a particular school and can’t be put off indefinitely.
As a result, those homes have also held their value better than most. Nationally, house prices have come down by 0.1% over the last twelve months, but 3 and 4 bed homes’ values have risen by 0.7% over the same period (source: Rightmove).
Another sector that’s currently seeing growth is homes for first time buyers. According to Robert Gardner, Nationwide’s Chief Economist,
“The number of mortgages being taken out by first time buyers has continued to approach pre-financial crisis levels in recent months.”
”First time buyer numbers have been supported by the strength of labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum.”
April’s price rises vary somewhat across the country. The biggest growth areas were Yorkshire and Humberside (1.9%) and the South East (1.7%). There were no fallers, but the lowest growth occurred in the North West at 0.4%. In London, prices rose by 1.1%, which was the largest rise at this time of year since 2015.
The biggest rises were in the centre (+2.7%), although prices actually fell by 0.3% in outer London. And, like in the rest of the country, it was second stepper homes that faired the best – up 2.7% and those properties suitable for first time buyers (+1.0%). Houses at the top of the ladder fell by 6.3%.
Even so, there is no doubt Brexit is dampening demand and tipping the scales in buyers’ favour. The Bank of England’s figures show mortgage approvals for house purchases fell by 4.6% in March and were nearly 6% below the long term average.
When we finally get a resolution, we may well see the reverse of this pattern as considerable pent-up demand is released.
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