The chief economist who compiles Nationwide’s monthly house price index says it is too early yet to see the impact of the Brexit vote on the housing market.
Robert Gardner hints that the impact may not be as bad as many fear.
“Ultimately conditions in the market will be determined by conditions in the wider economy, especially the labour market. It is too early to assess the impact of the referendum vote on the economy. However, it is encouraging that the labour market had remained robust in recent months, with solid employment growth and the unemployment rate declining to an 11-year low in April. Borrowing costs also remained close to historic lows” he says.
“Moreover, the lack of homes on the market – with estate agents continuing to report a record low number of properties on their books – will also provide underlying support for prices even if demand softens” he adds.
The market has become difficult to read in any case, Gardner concedes, because of the fall-out from the extremely high sales volumes ahead of the April 1 stamp duty deadline.
Commenting on his latest figures, Gardner says: “Annual UK house price growth has remained fairly stable over the past 12 months, confined to a fairly narrow range of between three and six per cent. This trend was maintained in June with price growth at 5.1 per cent, up slightly from the 4.7 per cent recorded in May.”
In the market landscape until the referendum, Gardner notes that southern areas of England continued to record the fastest rates of house price growth.
"The Outer Metropolitan region again had the strongest rate of annual price growth of 12.4 per cent [in the second quarter of the year] up from 12.2 per cent in Q1. Despite a slowing in Q2, London was still the second strongest region with prices up 9.9 per cent to a new all-time high, some 54 per cent above pre-crisis levels, and compared with 10 per cent for overall UK house prices” Gardner says.
The North of England was the only region to see house prices decline in Q2 - average prices there are currently nine per cent below their pre-financial crisis peak.
“It remains the case that the pace of house price growth tends to decline as you move from the south to the north of the country, even though prices in the south are already well above pre-crisis levels, while in Northern Ireland, Scotland, Wales and the North of England prices remain well below their 2007 highs” adds Gardner.