By Bea Patel, TLE Property Editor and Director of Shop for an Agent
Confidence among sellers has been dampened by the outcome of the Brexit vote.
Figures published by home.co.uk show London prices, which were already looking the most overvalued, have been hit the hardest, falling 1.1 per cent in one month (around £6K less for the average home in the region).
The average house price in the South East also slipped 0.2 per cent during the last month, but the biggest drop outside London was in the North East, dropping 0.7 per cent. This fall comes as a serious blow to a region that was just showing the first signs of recovery since the financial crisis sent the market into a downward spiral.
Several English regions and Wales still indicate price growth. East Midlands rose the most – by 0.7 per cent over the last month, followed by the North West by 0.4 per cent, Wales by 0.4 per cent, Yorkshire by 0.3 per cent, the West Midlands by 0.2 per cent and the East of England by 0.1 per cent. As the Brexit vote is only two weeks old, these figures may turn negative next month.
While the key drivers of lack of supply and cheap credit remain, uncertainty brought about by the Brexit vote is undermining the property market. Investors are justifiably concerned.
Capital inflows into UK commercial property have already dropped by 50 per cent over the last quarter, according to the Bank of England, and Barclays Plc has recently downgraded UK homebuilders.
According to the financial news agency Bloomberg, the FTSE 350 Real Estate Investment Trust has fallen 19 per cent since the vote, and the Bloomberg UK Homebuilder Index has slumped 35 per cent. The confidence in the marketplace that took years to restore after the fall of Lehman Brothers has evaporated post-Brexit.
Overall, the current mix-adjusted average asking price for England and Wales is now 6.1 per cent higher than it was in July 2015. Home.co.uk predict this figure will tend towards 0 per cent over the coming months.