A leading estate agent has moved to express his view that inflation is a bigger threat to the confidence of the housing market than Brexit.
In a statement, former RICS residential chairman and London estate agent Jeremy Leaf, said: ‘If the cost of everything is going up, people feel poorer and less inclined to take on further debt. With the housing market it always comes down to confidence and if people see bad news, they tend to overreact, sit on their hands and do nothing.’[1
The statement from Mr Leaf comes on the heels of an announcement that inflation has risen to 1.6%, the highest for 18 months. This increase was larger than expected and was attributed to the effects of the fall of Sterling since Britain decided to leave the EU.
Leaf’s comments also came after the ONS released its figures for house price rises over the year to November.
Is inflation a bigger threat than Brexit?
According to this report, prices increased by an average of 6.7%, up from 6.4% in October.
The average price of a property in the UK was £218,000, £14,000 greater than November 2015 and £2,000 more than in October. The average price of a property in England is now £234,000.
Wales saw prices increase by 4.1% in the same period to £147,000 and in Scotland, by 3.3% to hit £143,000.
‘The house price index findings are not too surprising because … they are a little bit historic. We expect to see some moderation in price growth in future as we have already seen on the ground in the past month or so. Shortage of stock and increased nervousness is showing itself in only slightly higher prices and lower activity,’ Leaf concluded.