As uncertainty over the future of the UK’s relationship with the European Union remains, it appears that its business as usual for the housing market. With over a month since the historic vote, a number of surveys containing data covering activity in July have been published, with the Nationwide house price index among them.
High street lender Nationwide publishes its index every month based on its own mortgage data. In July the lender said house prices were 0.5% higher than they were in June and 5.2% higher than they were in July 2015. The June index was less positive, showing a monthly price rise of 0.2% and annual growth of 5.1%.
Good numbers right? Yes, they are, but they probably don’t fully reflect house price activity in July due to the lag between offers being made and mortgages being finalised. Also, this month’s index shouldn’t be used as an indication that all is happy in the UK’s housing market since the referendum, Nationwide’s chief economist Robert Gardner said in a press release.
“The outlook for the housing market remains unusually uncertain and it may take several months for the underlying trends in the market to become evident,” Mr. Gardner said.
Nationwide’s cautious stance is understandable as there are many possibilities in the future but no indication of what the Government’s intentions are or how receptive the European Union will be.
In the meantime, separate data from the National Association of Estate Agents for June – mainly pre-vote – showed that demand and sales remained strong in the final weeks before the vote. There was a drop off in the number of properties being put up for sale in the final week of June after the referendum, with close to a 60% fall in the number of buyer enquiries and new properties being brought forward for sale, the survey showed, as uncertainty hit hard. However, first-time buyers remained firmly in the market, with 30% of all sales being made to the group – the highest level since October 2015.
“In periods of extreme political and economic uncertainty, the housing market will always respond,” NAEA’s managing director Mark Hayward said. “We remain upbeat and need others in the industry to do so as well. The new Housing Minister confirming his commitment to building one million new homes will be encouraging for many buyers, especially those looking to buy their first home. Hopefully we should soon see housing market confidence bouncing back to the levels seen pre-Brexit.”
Both surveys report elements of positivity and caution in the housing market in the immediate aftermath of Brexit. Caution is one of the main moods currently being shared by consumers and businesses and that isn’t likely to change anytime soon. However, provided people can see the pockets of positivity too, then the UK’s housing market shouldn’t suffer too badly and activity will return.