House values continue to plummet amid Brexit fears
New market research from Halifax has shown that the continuing uncertainty surrounding the UK’s relationship with the EU is having a worrying effect on London house prices.
If you’re one of the many homeowners within the UK looking to sell your house fast, you may be asking yourself “how much are properties in my area?” in order to gauge a decent asking price and subsequently make a decent profit. On average, homeowners have historically been able to rely on a 2% increase in property values per annum, and despite 2017 being considered a relatively slow year for economical growth, a poll of economists by Reuters still forecast a 0.2% increase in house prices for January.
Unfortunately for those hoping to place their home on the market in the near future, the research by the leading UK mortgage lender has found that prices actually fell by 0.6% in the first month of 2018. Combined with the 0.8% fall in average values during December 2017, experts have been quick to note that this is the first time that house prices have fallen for two months in a row since the Brexit referendum in June 2016.
The focus for this surprising drop has been centred around London, as fear surrounding the future of the capital in relation to foreign business investment – specifically the likely movement of large MNC operational bases to the continent – continues to worry potential buyers.
For those living outside the capital, however, there is reason to be hopeful as house values appear to be relatively unaffected by the concerns held by many within the financial services sector.
As the Tory-led government continues to deal with rebel back-benchers and criticism from the opposition regarding their ongoing negotiations over the enactment of Article 50, the BoE has been warned that the current high rates of inflation would likely be exacerbated if they were to introduce additional interest rate increases any time soon, as it would give potential London-based buyers further reason to avoid applying for mortgages at a time when the market could benefit from a fresh influx of investment.
“Housing market activity is expected to remain lacklustre as the marked squeeze on consumer purchasing power only gradually eases. Confidence is fragile and appreciable caution persists over engaging in major transactions,” said Howard Archer, an economist at consultants EY Item Club.
“The MPC can’t ignore the evidence of a housing market slowdown now in front of them, so we doubt that they will signal to markets tomorrow that interest rates could rise as soon as May.”
While many vendors may be willing to delay the sale of their house, there are many who may prefer to sell in a short-time frame in case house price growth continues to slow as we approach the deadline for the UK to leave the EU. In these situations, sellers can always rely on house buying companies to process a sale in as little as two weeks, without having to incur the normal fees traditionally associated with estate agents.