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Brexit analysis shows vote has affected UK prices and sales
Overall, both property prices and sales in the UK have fallen by around 8% since the referendum decision to leave the European Union, but there are wide regional variations. London, the Home Counties and Northern Ireland have been the hardest hit by Brexit, according to a survey covering the four weeks before and after the vote on 23 June carried out by ReallyMoving. It found that sales fell by 8% and prices also fell by 8% across the country but sales were down much further in London by 44% while prices in Scotland increased by 15%. Sales volumes fell markedly, down 12% for the month after the vote compared to the month before, based on the 35,000 people who registered for quotes for conveyancing, surveys and removals with the firm. Although some summer seasonal decline is expected, typically around 4% to 5%, the firm says that this is a seasonally adjusted 8% fall, an unusually high volume drop and the fall of 8% in average property is a significantly larger month on month change than seen at any point in the previous five years. Looking at the breakdown in prices and transaction volumes across the UK reveals striking regional differences. While London remains by far the highest-priced region, prices have fallen 12% since Brexit, and property purchases down 44%. The number of property purchases has fallen in all regions, most strongly in London, the Home Counties, and Northern Ireland, while Wales saw a drop of just 3%. Although prices fell significantly in London, there were even bigger declines in the North East of England and Northern Ireland, as both fell 17%. But, prices rose by 15% in Scotland, and by a more modest 7% in Wales. International moves have increased markedly since Brexit, but only for moves away from the UK, which have increased by 43%. Moves to the UK are broadly unchanged. The most popular destinations for international moves from the UK are to Spain, USA, Canada, Australia, Germany and Italy. ‘Brexit has had a marked impact on the UK property market. The drop in transaction volumes has been striking, particularly in London, the Home Counties and Northern Ireland,’ said Rob Houghton, chief executive officer of ReallyMoving. ‘In the medium term we would expect volumes to pick up if the price falls are maintained, but it is clear that many prospective home movers are sitting tight until there's greater clarity over the post-Brexit economy and our likely new relationship with the rest of the EU,’ he added. Continue reading
Sales up almost 5% in Scotland but prices down
Property sales in Scotland increased by almost 5% year on year in the second quarter of 2016 but prices have fallen by 2.3% over the same period, according to the latest official data to be published. Sales were up 4.9% to 25,760, the data from the Registers of Scotland shows, the highest volume of sales for this quarter since 2008/2009 with the average property price down to £164,326. A breakdown of the figures show that the highest percentage rise in volume of sales was recorded in Argyll and Bute, with an annual increase of 24.5% compared with the same quarter the previous year. Edinburgh City recorded the highest volume of sales at 3,178, a rise of 8.6%. The largest percentage fall in volume of sales was in Aberdeen City, which showed a drop of 19.5% to 1,063 residential sales compared to the same quarter last year. The highest percentage fall was recorded in West Dunbartonshire, with an average price of £105,859, a fall of 12.7% compared with the same quarter the previous year while East Renfrewshire recorded the highest average at £241,364, an increase of 11.7% compared with the same quarter the previous year, which was also the largest percentage rise of all the local authorities over the year. The total value of sales across Scotland registered in the quarter increased by 2.5% compared to the previous year to just over £4.2 billion. The City of Edinburgh was the largest market with sales of £745.7 million for the quarter, an increase of 7.1% on the previous year. South Ayrshire recorded the highest increase in value with sales of £92.2 million, an increase of 27.8% compared with the same quarter last year. Aberdeen City showed the largest decrease in market value, a decrease of 24.4% to £223.8 million compared to the same quarter last year. All property types showed a decrease in average house price in this quarter. Terraced properties showed the biggest decrease down 5.6% to £132,700. Detached, semidetached and flats saw decreases in average house prices of 3.7%, 0.8% and 4.0% respectively. With the exception of detached properties, all property types showed an increase in sales volumes with flats showing the biggest increase at 11.2%. The volume of sales of detached properties decreased by 3.4%. The rise in property sales in Scotland over the last quarter indicates that there is still confidence in the market, according to Michelle Grant, investment director of Grant Property. ‘From a price perspective we are surprised to see a decline. On the ground we are still seeing prime city centre properties in Glasgow and Edinburgh selling for between 10% to 20% over home report valuation,’ she added. Simon Brown, partner and head of residential sales at CKD Galbraith, believes that the Scottish property market has remained resilient to political and economic changes despite the uncertainty of Brexit. ‘As a firm we have not experience any negative effects or hesitancy from… Continue reading
Call for funding changes for more homes to rent in UK
New UK housing minister Gavin Barwell is being urged by property industry commentators to support the building of more new homes to rent by relaxing the rules around public funding in the sector. The appeal has been launched in response to an independent report published this week by the Centre for Economic and Business Research and commissioned by the National Housing Federation which predicts that the UK economy could contract by £145 million in the next 10 years if the rate of growth in new housing completions falls at the same rate as it did in 2008. Spokesmen for the National Housing Federation and the Chartered Institute of Housing argue that building more homes for rent or shared purchase would help keep housebuilding and the economy going in a time of economic austerity. Up to 300,000 units could be built by housing associations by 2020, according to the NHF, if funding is made available even in the face of economic uncertainty. CIH statistics show that during the last recession the number of homes built by non-profit housing associations increased by 22% between 2007 and 2009, while private development dropped by 37%. The call from the sector bodies for the government to redirect some of the current funding to allow construction of new housing association homes for rent is likely to be welcomed by would-be occupants, demand from whom currently outstrips supply. Reallocation of the central budget to allow housing associations to build more rental homes would also mitigate the negative effects of a general slowdown in the housebuilding sector, widely anticipated as a result of Brexit, according to James Howard, partner in Clarke Willmott LLP’s social housing development team. ‘A change in funding strategy to switch the balance to building more for rent than for sale should allow for a supply of new homes to continue despite the gap private sector housebuilders might leave behind,’ he said. According to Jonathan Hulley, Clarke Willmott’s head of housing and asset management, the Government’s flagship Starter Homes scheme would lead to the undermining of sales of more affordable shared ownership properties and fails to address the urgent need for more affordable homes to rent. ‘The social housing sector argues that housebuilding is needed now more than ever. People are in need, waiting lists are still growing, so the policy of building more homes for sale only needs to be revised and adapted to allow for the building of more homes for rent,’ he said. ‘There is also a worrying lack of capacity on the ground to deliver which needs to be addressed, and a question mark over what appetite there is for outright purchase of houses on large scale,’ he pointed out. ‘On the other hand the kind of shared ownership offered by housing associations puts… Continue reading
