Written By Em

The latest UK House Price Index from the Land Registry/Office for National Statistics (ONS) shows that the property market has cooled over recent months, but experts believe it will not crash following the Brexit vote.

As of July 2016, the average house price in the UK is £216,750, after values rose by 0.4% over the month. Although this marks a slowdown in the market, prices are up by 8.3% on an annual basis.

Analysis has found that although property sales are down, low supply is keeping house prices high.

Property Market Cools But Won’t Crash, Claim Experts

House price growth remained strong over July, rising by 12.3% year-on-year and 1% on the previous month.

Thomas Fisher, an Economist at PwC, comments on the figures: “Today’s data from the ONS shows a moderation in house price growth from 9.7% in the year to June to 8.3% in the year to July. But house prices still edged up by 0.4% between June and July.

“This suggests that market demand remained relatively resilient after the Brexit vote, despite some slowdown in mortgage lending. However, as many of these transactions will have been in motion since before the referendum, more data will be needed to make a proper assessment of how the referendum result is affecting the housing market.”

He predicts: “Our own expectation is that the UK housing market will cool not crash. In our main scenario, average UK house price growth is projected to decelerate to around 5% in 2016 and around 1% in 2017.”

The founder and CEO of eMoov.co.uk, Russell Quirk, is also pleased to see some positive figures. He says: “Another index and another positive outlook where the post-Brexit property market is concerned. [This] shows that there has been no immediate impact on the market in England since Britain’s decision to leave the EU.

“Although this isn’t news as such, this data from the Land Registry acts as a more concrete confirmation compared to the likes of Halifax and Nationwide, who base their figures on mortgage data.”

However, Katherine Binns, of the HomeOwners Alliance, has witnessed a cooling in the market from property buyers and vendors.

She explains: “We are seeing signs of hesitancy among both buyers and sellers at the moment. We expect this to continue in the short term until there’s greater certainty around the economic impact of Brexit. Time will tell whether the recent Bank of England cut in interest rates will help to boost confidence and generate an increase in buyer and seller numbers in the autumn. However, despite this slowing in activity, tight supply is likely to keep upward pressure on house prices. So we’re not expecting a drop in the short term.”

Finally, the CEO of estate agent Marsh & Parsons, David Brown, looks at the data from a London point of view.

He says: “It’s been nearly three months since the referendum and London, which voted overwhelmingly to remain, seemed to approach the market with more caution. However, it is extremely pleasing to see that the definitive UK House Price Index clearly indicates that London is shrugging off any negative sentiment about Brexit.

“The ONS data shows that London is again leading the way, with a yearly uplift of house prices in the capital of 12.3% to July, only surpassed by the Eastern region, where values are much lower. The prime end of the market has undoubtedly seen challenges as a result of George Osborne’s considerable Stamp Duty hikes, but we hope that we may see these reversed in the upcoming Autumn Statement.”

He concludes: “The general picture is that the property market in London is returning to normal, and that has to be positive for buyers and sellers alike.”