It’s easy to talk about the UK property market as if it’s one single unit that follows the same trends and fluctuations. But this is far from the case. The British property market is as diverse as each of the UK’s neighbourhoods. Although affected by the same things - changes in housing policy, the health of the economy, Brexit - each area deals with these shifts in different ways.
Brexit has, without a doubt, had an impact on the property market. But when you take a closer look at the individual performance of each region, it’s clear the negativity that dominates the press is overstated.
Headlines latch onto the problems felt by the prime London market. But, the majority of buyers and sellers aren’t interested in homes worth over £2 million, and even fewer over £5 million. These homes account for just 1-2% of property transactions, yet they dominate our impression of the health of the market.
The market has on the whole remained stable, but cautious. Across the UK, house prices have seen an average increase of around 10% since the referendum. And, there have been higher rates of growth in pockets of the North and the Midlands.
Buyer demand also remains resilient. The number of first time buyers continues to increase, with the encouragement of ‘Help-to-Buy’ schemes. Low interest rates and greater access to mortgages are also encouraging buyers.
Although it’s often the focus of media attention, London is not representative of the situation nationwide. Prices up North are faring much better than down South. For example, prices in Nottingham have seen a growth of 10.2% in the last 6 months. And, cities like Manchester, Leicester, and Leeds continue to create high demand due to their strong local economies.
Even within London the story is not universally pessimistic. Average house prices are still only 3% lower than the all time highs of 2017. And, prices are 58% higher than in 2007 - before the financial crash.
‘It’s certainly not accurate to say the UK market is down and out and for the vast majority, property prices continue to creep up, albeit at a slower rate than previous years.’ - Colby Short, CEO and co-founder of GetAgent
There appears to be a trend in how areas voted and the current state of their property market. Research by PropertyWire has found that 16 out of 20 of the best performing areas (in terms of house price growth) voted to leave the EU. This suggests that the market is determined largely by the confidence of those selling. Those who voted to Leave are more likely to predict a positive outcome from Brexit than those who voted to Remain. They are therefore more likely to make larger financial decisions.
Because of this, it’s important to understand your local area. Tools, such as our online valuation and area guides, can be used as a starting point for researching what’s going on. Once you decide whether to make the move, enlist the help of an estate agent with a strong track record and local expertise. They’ll be able to talk to you in more detail about the conditions in your specific neighbourhood.
However, many commentators suggest that Brexit is not the sole, or even the most important factor influencing the property market. It’s fundamental issues such as affordability and supply of housing, and the cost of moving, that are more important for the health of the market.
For example, some people point to the changes in Stamp Duty Land Tax in 2016, as a key reason for the decline in London house price growth. This change in policy introduced a surcharge on Stamp Duty for purchases of second homes, with a new lower eligibility threshold. This made it more expensive for many people to invest in property, particularly in London.
Because of the strength of its private rental sector, and the higher average price of properties, this new surcharge had a large impact in London. In comparison, up North, where properties are on average cheaper, Stamp Duty changes have a less dramatic impact.
Some people also point out that house prices in London were becoming increasingly unaffordable and therefore it was inevitable that some decline in growth would occur. Growth of house prices in London and the South East really took off in 2012, and began to slow to more sustainable levels from 2016. It’s likely that this represents a much needed readjustment of prices to align with what people can afford.
In contrast, house price inflation in the North over the past few years has not been so dramatic. Prices are more in line with what people are earning and are generally more affordable. This could explain why house price growth in most areas has not declined as much as in London and the South East.
Brexit is just one of many things influencing house prices and sale times - for good or bad. Doing your research about your local area and ensuring you have the support of an expert estate agent will give you the best start for a smooth sale. They’ll be able to tell you about your local market and are likely to be aware of the interested buyers in your area.
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