Hands up if you were under the impression that UK property prices have fallen since the EU referendum in the summer of 2016. Well, you are not alone! The doom and gloom which followed the result back in June 2016 has, in the eyes of many experts, actually held back the UK property market. Akin to blowing up a balloon and waiting for it to pop, many investors have been sitting on the sidelines awaiting the much publicised property market crash. Has it arrived?
Statistics, statistics and statistics
The UK Land Registry offers one of the most conservative house price indexes (*) available today based upon actual transactions which have gone through. So, with a shot in the dark how would you expect property prices to have performed between June 2016 and June 2019 (the latest figures available)?
All house types
Over the period the average house price in the UK has increased from £212,887 up to £230,292 which is an increase of 8.18%. Not bad?
Detached properties
Over the same period detached properties have increased in value from £319,683 up to £349,879 which is an even better increase of 9.45%. Property collapse, what property collapse?
Semi-detached properties
Semi-detached properties have increased from £199,148 up to £219,752 which is a very impressive increase of 10.34%. Recession, what recession?
Terraced houses
While the performance of terraced houses has been a little more subdued, they have still increased in value from £173,343 up to £187,082 which is an increase of 7.93%. Still surprised that there has been no property crashes yet?
Flats and maisonettes
Remain as will highlight the performance of flats and maisonettes which have only increased by 4.27% over the period in question. The average value has risen from £192,478 up to £200,699, again not exactly a collapse?
If the worst-case scenario over this period is an increase of 4.27%, in the flats and maisonettes sector, should we really be concerned? There has been a reduction in growth rates over the last few months as we move towards the crux of Brexit negotiations and the make or break date of 31 October 2019. Should we be cautious?
Timing your investment
Earlier this week UK politics hit a new low with the proroguing of Parliament and the refusal of opposition parties to hold a general election. Legal challenge after legal challenge has muddied the waters and continues to strip more power away from the current Prime Minister Boris Johnson. However, over the last few hours we have heard talk of a potential breakthrough in relation to the Northern Ireland backstop agreement. We also hear that Boris Johnson will be in Europe to talk with the main movers and shakers on Monday of next week. Have we reached the bottom of this ghastly shaming of UK politics?
Well, they say that the proof is in the pudding so the fact that sterling has risen to its highest level since July this year would suggest there is renewed confidence a deal can be brokered at the last minute. However, nothing is ever certain with this Brexit pantomime so keep your eyes peeled and ensure that you have your investment funds available.
Resources:
http://landregistry.data.gov.uk/app/ukhpi/browse?from=2016-06-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2019-08-01