Is fear of Brexit having a negative effect on house prices?
Areas of the UK where the population voted more strongly to leave the EU are enjoying faster house price growth than their ‘pro-remain’ counterparts – causing many homeowners to ask “how much is my house worth?” in the light of ongoing Brexit discussions.
Experts believe that the regional difference is the result of a number of factors – but is predominantly attributable to consumer confidence.
So, you may ask, “how much is my house worth when considering the effect of consumer confidence?”
For many, it is a simple case of cautiously weathering the storm that is the triggering of Article 50 – but for some, there is a great urge to sell sooner rather than later in case value increases continue to stall.
“There is a clear pattern here; areas that voted more strongly to leave the EU have seen property prices grow faster over the past six months than areas that were pro-remain,” said Paula Higgins, chief executive of the HomeOwners Alliance.
“Of course, house prices are dictated by a myriad of economic, political and social factors, but confidence – the all-important ‘feel-good factor’ – is vital.”
This ‘feel-good factor’ is a key element for large purchases such as housing, as it buoys confidence for the potential buyer in terms of future profits. It does, however, appear to be an element that is absent in the minds of those more pessimistic about the future of the UK outside the EU.
This difference in attitudes is epitomised strongly by the state of the Scottish property market, where property values have actually reduced by 1.2% since the referendum. With talks of a second independence vote from the UK, alongside a prevalent pro-remain stance across the country, it becomes clear that consumer confidence in the future is the mythical variable.
Capital affordability: How much is my house worth?
Other pro-remain areas including London have also fared poorly, where prices increased by only 2.45% since June 2016, far below regions such as Yorkshire and Humber – where values rose by a staggering 5.53%.
While many industry experts including RICS have noted that London house prices have either stalled or fallen for the past several months, it is still not clear whether or not the catalyst has been as a result of the Brexit vote – or simply the fact that previous value increases in the capital have now reached a point where they are unaffordable for the average potential home buyer.
Of course, the reasoning behind much of the variance in property value across the UK cannot simply be blamed on the referendum as Brexit itself has yet to be realised. For many however, the need to sell their homes fast is overriding the urge to wait for the outcome.
So if you are thinking of a picking up sticks and moving to pastures new before prices begin to fall, you may be asking “will I make a profit on my home? And if so, how much is my house worth?”
Unfortunately, for the for the time being it appears that for most potential vendors, as well as industry experts, there is no easy answer.
Worried that you may lose money on your house if you wait? Ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 to find out how much you could get for your property.