The data tracked 20 UK cities following the referendum in 2016 and has been monitoring average property prices across that period and has noted that only one of those cities has seen a drop in average prices. Aberdeen was the only city which was seen to have a reduction and the report directly stated it had found “no immediate deterioration” in either prices or market activity in that time.
Even Central London, an area considered to be going through an extended rough patch, has seen prices increase 2% since the 2016 referendum.
Richard Donnell, insight director at Hometrack, said: “Two and a half years on from the Brexit vote, our analysis reveals a limited direct impact from Brexit uncertainty on the housing market thus far. Large regional cities continue to register above-average house price inflation, with the discount between asking and sales prices narrowing on rising sales volumes.”
The top performing cities, according to the data, were Birmingham, Edinburgh and Manchester which saw prices rise by an average of 15% over the two years since the vote. The report measured the difference between asking prices and sale prices and found that Manchester had one of the smallest ‘discount’ prices at just 2%. In comparison, London’s difference was 4.8%, although this has reportedly narrowed in the past two years. Liverpool’s difference narrowed to its lowest in five years.
It is of course true that the London market has slowed in recent years, but it should be noted that this is in comparison to fairly rapid growth beforehand and that prices have still increased marginally. It is thought that, rather than being down to Brexit, prices have dropped in relation to earnings and affordability.
Demand remains strong for property but, in fact, as with most other cities London is seeing a large increase in demand for Private Rented Sector (PRS) housing whilst most remain unable to afford deposits. Speaking more about the capital, Donnell said: “London has led the housing recovery since 2009 and now it is leading the slowdown as weaker market fundamentals — stretched affordability, multiple tax changes, new mortgage regulation — have constrained demand and reduced sales. While the uncertainty from the Brexit vote has compounded this reduction in London house price growth, it has not been the root cause.”
Meanwhile regional cities like Manchester, Leeds, Liverpool and Sheffield continue to reap the benefits of the relative slowdown in central London with strong growth in average prices and also rental incomes for investors and landlords. The regional cities have been experiencing a boom in activity recently and most investors are now looking North for buy to let property investment.
Whilst not strictly surprising statistics, it’s reassuring for investors and landlords that despite plenty of media coverage and some turbulence in markets, the property market and average prices have remained stable and profitable whilst Brexit draws towards its conclusion.