‘Brexit’ Fails To Halt Property Price Rises
The building society Nationwide reports property prises in August rising by 5.6% on an annual basis, up from 5.2% in July.
According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, “it’s looking like the predicted collapse of the property market post-‘Brexit’ may not happen.”
Mr Weaver states that “the property market has stood up to a strong headwind of political and economic uncertainty, and prices haven’t collapsed as many said they would after the U.K. voted to leave the E.U..”
To explain this, he points to “the interest rate cut earlier in the month” which gave the market “a confidence boost and eased any post-‘Brexit’ jitters.”
Falling Demand Matched By Falling Supply
The apparent health seen in the house prices may in part be down to the amount of houses on the market being near a 30 year low.
Longer term, the impact remains unclear, consumer confidence did see a significant fall and the Bank of England predicts the economy will grow very little in the coming year.
Overall, Nationwide’s House Price Index showed falling activity with the number of mortgages approved hitting an 18 month low in July. Nationwide’s chief economist, Robert Gardner did lay the blame for this at the “uncertainty surrounding the EU referendum and the introduction of additional stamp duty on second homes.”
Price Rises Aided By Government Scheme
Along with the interest rate cut, Nationwide credit the government’s new term funding scheme with maintaining growth guaranting that the Bank of England will provide low-cost funding to lenders. Mr Weaver also points towards a future “multi-billion pound package to support housebuilding and stimulate the economy”.
It appears that any immediate negative impact ‘Brexit’ may have been mitigated, in fact, as Mr Weaver concludes, “people gravitate to bricks and mortar in times of economic or political uncertainty.”
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