This week the latest UK House Price Index provided us with a concrete look at the state of the market.
The UK HPI is based on actual sales completion data and is far more accurate than other indices based on mortgage approvals, however, this does mean that the numbers are reported on a lag and so the latest index is for November 2018.
Heading into a traditionally slow time of year, it’s no surprise that on a monthly basis prices fell by -0.1%. While they were still up 2.8% on this time last year, the latest figures remain consistent with a market that has seen erratic price growth due to Brexit uncertainty and wider economic instability.
The latest index also highlighted a fall in property transactions, with the number of house sales down 0.5% annually. This is no doubt a direct impact of dwindling levels of buyer demand with mortgage approvals also down 1.7% on an annual basis.
So as many buyers refrain from a purchase in fear that a messy exit from the EU could see prices plummet, while many sellers hold off on a sale in the hope that any form of stability returning to the market could see lost value recouped, it’s easy to see why the top line figures are falling at each end of the property cycle.
But is it as bad as it seems?
Despite the ongoing spectacle that is Brexit, the market is still moving along, prices are still up annually and there are still consistent levels of buyer demand and property transactions. In fact, in some areas, you could be forgiven for thinking there is no such thing as Brexit at all, with parts of the Midlands, the North East and South West all performing very well indeed.
However, although the market is holding its own it’s hard to say how much it can endure and while its resilience will shine through regardless of the EU outcome, where we end up could decide on how long it takes to get back to full health.
Our resident property expert and Yomdel CEO Andy Soloman, was on hand to comment on the latest figures:
“If the relative calm before the storm has brought a further reduction in house prices, transaction levels and buyer interest, one must wonder what the forecast will be now the political headwinds have hit gale force level following yet another disastrous Brexit vote.
We will no doubt see many buyers and sellers batten down the hatches until further notice but once stability does returns, it won’t take much for the UK property market to dust itself off and activity to pick up once again. The question is, how much damage will have been done before we reach this point and how long will it take to rebuild? ”