Values of residential property in Britain fell by 0.9% month-on-month in July, according to new research from Haart.
This is a surprise given a good month of property sale transactions.
New buyers
The number of new buyers in the market actually increased during the previous month in Britain. This in turn aided a 6.5% month-on-month rise in property transactions. Many buy-to-let investors are now feeling confident to press ahead with transactions following the result of the EU referendum.
Despite this rise in transactions, results from the investigation show that UK house price values slipped to an average of £233,254.
A number of factors could have contributed to this decline. Many buy-to-let landlords have been detracted by the 3% additional stamp duty surcharge imposed in April.
Monthly UK house price values fall, despite increased sales
Pressing ahead with purchases
Paul Smith, CEO of Haart, said, ‘despite last month’s political turmoil, it seems buyers aren’t being deterred by the noise. We’ve actually seen a bounce in transactions in July, with a lot of buyers pressing ahead with their purchase now that the referendum is over.’[1]
‘Prices have dropped slightly by 0.9% across the UK and have fallen 5.6% in London, showing that sellers are cutting deals to bypass the uncertainty in the wider economy and plucky buyers are taking advantage. Nevertheless, prices in London and across the UK both remain significantly higher than they were at the same time last year,’ he continued.[1]
Understandably, uncertainty is still prominent given the decision to leave the European Union. However, Smith believes the cut in interest rates will see mortgage rates fall further, meaning, ‘it won’t be long before the market bounces back.’[1]
‘The desire for people to own their own home or move up the ladder is as strong as ever and we have every reason to be confident about the property market’s long-term prospects. The only thing we have to fear post-Brexit is fear itself,’ Smith concluded.[1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/8/uk-home-prices-fall-despite-pick-up-in-sales-momentum