A two-speed market
Outside central London, despite predictions that Brexit could bring the residential housing market to an abrupt halt, it’s proving to be more or less business as usual. According to figures from high street lender Nationwide, asking prices went up 0.6 per cent in August. The increase is largely driven by increasing demand, a shortage in the supply of homes coming onto the market, and the slow pace of new housing development. The average house price was £214,000 in June, according to data from the Office for National Statistics, meaning that over the last decade the average cost of a house has increased by a staggering 50 per cent.
With few hard facts to go on at present, no-one knows for sure what effects Brexit will have, or indeed how long it will take for the UK to complete its withdrawal from the EU. Uncertainty may reduce the current level of demand for housing in the short term, but the chronic shortage of available property, especially family homes, leads many experts to predict that prices are unlikely to fall far.
At present, lenders continue to be lending as normal, but prices may decline if consumer confidence in the economy were to fall. On the upside, any fall in prices would be encouraging news for first-time buyers who have long found themselves priced out of the market.
With supply continuing to be a major issue in the housing market, all eyes will be focused on the new Chancellor’s Autumn Statement, which some predict will contain stimulus measures to increase the creation of more housing projects nationwide.
Making your move
If, for instance you are looking to buy a home that you intend to live in for many years, and you feel sure that you can comfortably afford the repayments, even if interest rates were to rise at some point in the future, then you are less likely to be affected by short-term market movements. With interest rates low and lenders offering very competitive mortgage deals, making the move could be the right solution for your housing needs.