Brexit Showing Little Impact as UK City House Prices Increase by 10% Annually
House prices in major UK cities went up by an average of 10.2% over the last year, indicating little impact of Brexit so far.
The data comes from the most recent Hometrack UK Cities House Price Index, and shows the same rate of annual house price growth seen in May this year but an increase of the 6.9% figure seen in June last year.
The numbers therefore suggest that the Brexit vote on June 23 is yet to have any real impact on sales volumes in cities, although a true indication of the referendum result implications on city property sales should become clear over the coming months.
Hometrack said that time lags will cause the official data to be slow in picking up the changes brought about by the Brexit vote, although it expects that London will “bear the brunt” of any slowdown.
Property demand was inflated earlier in the year as investors rushed to buy property before the new 3% stamp duty surcharge was introduced on April 1.
The research also indicates that the London property market has experienced a growing gap between lower sales and an increase in supply, a trend that suggests slower growth of house prices in the coming months.
Hometrack Insight Director, Richard Donnell, commented: “The headwinds that were facing the London market in the lead up to the EU referendum have intensified on the back of the vote to leave and are resulting in slower sales rates.”
Meanwhile, the latest data also illustrates an increasing divide in the current growth of house prices between cities in the north and south of the UK.
The fastest growing city in the UK is still Bristol, with a 14.7% yearly increase, although year on year house price growth in London and other southern cities such as Cambridge and Southampton have started to slow down over the last couple of months.