According to leading property website Rightmove, June marked the sixth consecutive month of house price increases. Their figures suggest that despite the ongoing political uncertainty and consequent reluctance of many potential buyers to commit, newly marketed property prices rose by 0.3% – equivalent to £1,058.
But not everyone agrees that prices are booming. According to the Nationwide, UK house prices grew by just 0.5% year-on-year in June as political uncertainty continues to dampen market sentiment.
Despite what the web figures may indicate, in the real world, many sellers are finding that their homes are taking longer to sell, and some are finding that they are having to reduce the price.
What is really going on?
Location is everything
At Continuum, we help buyers across the UK to buy homes and investment property. To find out what is really going on, we have looked a little closer at the figures.
We have seen that is true that prices overall are on the up – but price movements across the country are not uniform.
In some regions house prices are certainly going up – others may still be on their way down.
Markets in the north and midlands are behind the apparent surge in prices. Four regions; the North West, the East Midlands, Wales and Yorkshire and the Humber all confirmed highest ever prices.
But of course, these were the regions where prices tended to be at their lowest. The impressive price increases they are enjoying might more accurately be described as simply catching up with national averages.
In other parts of the country, prices may be static, and even falling in and around London. The capital has historically had the highest property prices, and the falling prices in some of the most expensive London boroughs may be a market correcting itself after years of overheating.
The price of newly marketed property in London has fallen by an average of 0.4%, or £2,709, last month.
Commuter towns serving the metropolis may not have suffered such dramatic falls, but they have certainly not been enjoying the growth of recent years or following the direction of prices in the north.
What is behind these changes?
There are several factors at work to change the way the property market is going – but it will come as no surprise that Brexit is involved in many of them.
- In London, a slight but already perceptible departure of European workers might be depressing the rental market.
- The fall in demand at the bottom end of the London market may be echoed by higher end properties may be falling back from prices that were frankly overheated.
- Across the UK, there is a fall in the price of flats. A fall in demand from Buy to Let investors who are pulling out may have led to figures from the Land Registry showing the cost of a typical apartment in England has fallen by 2.1% in a year.
- Brexit jitters may also be slowing down the market overall, meaning that overall numbers of sales are falling. Buyers may be cautious about the financial future. Homes seem to be taking longer to sell than previously – making price comparisons more difficult.
It looks as though low interest rates and the shortage of desirable properties in the right locations are still driving property price inflation – although in the south at least this growth may be on hold because of Brexit uncertainties.
Political certainty should restore confidence to the housing market, and when it arrives, pent up demand may come with it.
What does this mean for you?
These changes in the market may make expert advice from Continuum essential.
We can look at buying a property with you and see how a sale or purchase now could affect your overall circumstances and long-term financial position. If prices are falling in your region, we can help you understand the real impact it could have on your plans.
We can also help you get the very best deal on your mortgage. With many lenders competing for fewer new borrowers there could be some bargains to be had. Expert help is essential. Some mortgages are only offered via brokers, and you need to see not just the interest rate, but at fees which boost the real cost of paying for your home.
Whichever direction the market takes, if you are thinking about a move, simply call us at Continuum. Our experts will work with you to find the answers – and the mortgage – you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You Can view the full article here: Continuum