The election of Boris Johnson as Prime Minister has added, in the short term, to the uncertainty surrounding Brexit. Will there be a hard Brexit, or will there be a last minute compromise? And what will the consequences of a hard Brexit actually be? We will not know the answers until at least the October deadline. In the midst of what is traditionally a subdued summer market, it is therefore no surprise to find prices and sales volumes are a little flat.
What is surprising is, even now, house prices remain remarkably resilient. On an annual basis, according to most indices, they are still firmly in positive territory and much of that is down to a steady economy, high levels of employment and access to cheap mortgages.
As ever, there are variations across the country and the different sectors. Last month, it was the extremities of the country that fared best – Scotland (+1.3%), the Southwest (+0.3%) and the East (0.0%). The biggest fallers were some of those regions who had been performing well recently – the East Midlands (-1.3%) and Wales (-0.7%). The more significant variations, however, were happening across the different sectors. Asking prices for properties for first time buyers remained static but rose for second stepper homes (+0.2%). At the top end of the market, it was a very different story, with prices dropping by 1.1% (source: Rightmove).
Miles Shipside, Rightmove director and housing market analyst comments:
“While buoyant mortgage approvals indicate more resilient activity in the lower and middle sectors, it is the cash-rich in the upper end who appear most hesitant to engage. They are often discretionary buyers, whose needs for more space or the motivation for a change of location can be postponed. As a result, sellers in the upper end have had to drop their prices more both month-on-month and year-on-year, suggesting that the best bargain opportunities in the second half of 2019 for canny buyers could be in this price sector.”
Some of the more interesting figures are coming out of London at the moment. Having reached the limits of affordability, the capital’s housing market had been challenging in recent years. Now, it is finally showing signs of a recovery, albeit a slow one. Prices have traditionally always fallen in July, with an average drop of around 0.6%. This year, on the back of reduced stock levels, the drop had reduced to just 0.2%. And, as with the rest of the country, it was second stepper homes that fared the best – up 1.9% in July against a 4.3% monthly fall for houses at the top of the market.
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