The social, economic and political upheaval caused by Brexit and the general election have left many wondering about the state of the housing market. Questions linger over whether now is a good time to apply for a mortgage. Read on to find out more about the state of the housing market in the UK.
The effects of political and economic insecurity on the housing market
Political and economic turbulence often results in a slowing down of housing markets, as both buyers and sellers hesitate to take financial risks. The fallout from the Brexit vote and a surprising general election result has sent shockwaves through markets. This has been exacerbated by the Conservatives’ deal with the Irish DUP, a semi-coalition that may prove inherently unstable. It has resulted in buyers and sellers feeling reticent about making any big decisions. In addition, housing surveyors are also pointing fingers at record low stock numbers and tax changes as other factors limiting price growth and sales activity within the housing market.
As a result, we have seen UK house price growth slow down this month, with London being among the hardest areas hit. However, the effects aren’t being felt in the same way by all regions of the country. The Guardian reports:
“The average UK house price rose by £2,000 in June to £223,000 compared with the previous month, almost £10,000 higher than a year ago, according to the Office for National Statistics (ONS). While the annual growth rate has slowed since the middle of last year following the vote to leave the EU, prices are still outstripping increases in inflation and wages, at 4.9% in the year to June, down from 5% in May.
London experienced a £3,000 drop in the average price of a home to £482,000 in June from the previous month, but remains the most expensive UK region in which to own a property. The value of a home in the capital increased by 2.9% against the same time last year, while the lowest average price continues to be in the north-east, at £130,000, where prices rose by 2.5% over the year. The fastest growing part of the country for home values was the east of England, with growth of 7.2% in the year to June, followed by the east Midlands at 7.1%.”
Surveyors trace back the slump in London house prices to stamp duty tax changes on buy-to-let of properties, George Osborne’s income tax changes (which removes certain interest relief for landlords over the next few years) and the uncertainty of Brexit. Despite these issues, areas such as Liverpool and Venmore have seen an increase in buying and selling activity. It is in areas like these that great deals can still be found, and where the wider effects of the last year’s events are being felt less. Certainly, it would appear that some areas have even benefited from it.
The current state of the housing market
The current political, social, and economic insecurity we are experiencing in the UK has led to a stall on buying and selling within the housing market. However, there are still many good deals to be found – especially if you are a first time buyer. If you’d like more advice and guidance on applying for a mortgage, then please get in touch with a member of our friendly team of professionals today.
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Written by: Editorial Team