We say it time and time again but despite the doom and gloom surrounding the UK economy house prices continue to move higher with the London the only area struggling at the moment. According to RightMove the average house price in the UK is now £313,000 with yet another monthly increase last month. While sceptics continue to wait for the “crash” there is no sign of investors fleeing the UK property market in the short to medium term. So, what is the average price of property across the country and why does it continue to rise?
Impressive performance
Between March and April 2017 the best performer in the UK was Wales which reported a 7.6% increase in property prices from the previous money. The Welsh property market has been in the doldrums on and off but it seems that Brexit is being ignored and investors are ploughing money into the country. The average property price increased by just over £13,000 in one month and at this moment in time there is no reason to believe further increases will not follow.
The East of England and South-West of England both saw prices rise by 2.8% to an average of £349,269 and £304,370 respectively. When you bear in mind historically low interest rates, relatively low inflation and jitters regarding Brexit, this in itself is an impressive monthly performance. It was also interesting to see that the North West increased by 2.5% and the North East by 2.4%, areas which have not always attracted the attention of investors in years gone by. It may be that some investors are starting to see value further up the country which compare favourably to London on purely statistical terms.
First-time buyers back in the market
It would appear that first-time buyers are supporting the UK property market in the short term possibly making best use of relatively low finance costs while they are still available. As we approach the general election there is also every chance that politicians will promise the earth to first-time buyers to encourage them to dip their toe into the market. As a consequence, this momentum between March and April may well continue in the short to medium term. There was also renewed evidence of competition within the UK mortgage market with some “eye-catching” mortgage deals available although we await more details.
If we look back to the summer of last year when the Brexit vote was announced there was talk of a collapse in the property market, massive job losses not to mention major economic challenges. It would be wrong to suggest that we are over the worst with regards to Brexit, indeed we have now only entered negotiations, but the doom and gloom merchants of last year have seen their predictions blown out of the water.
Conclusion
It is difficult to know what to say about Brexit and its potential impact on the UK property market because so far it has been negligible. In a world where sentiment can impact prices overnight there has been little or no impact on UK property prices from the Brexit concerns highlighted by many doom merchants. Quite how far UK house prices can push in the short to medium term is debatable but there seems to be a sustained appetite for UK housebuilding stock.