House prices up 5.1% in June in calm before the storm

Ryan Bembridge

June 29, 2016

Ian Thomas LendInvest

Annual house price growth stood at 5.1% in June to reach £204,968, Nationwide’s House Price Index has revealed.

Regionally prices rose by 12.4% in the Outer Metropolitan region (London commuter belt), followed by London at 11.5%.

However prices fell by 1.1% In the North and 0.2% in Scotland.

House prices up but outlook remains clouded

Ian Thomas (pictured), co-founder and director of LendInvest, said: “The vote to leave has come as a shock to many, but in our view, the fundamentals of the UK housing market won’t change abruptly.

“People still need homes to live in, whether we are in the EU or not, and the fact is that demand for housing massively outstrips supply.

“Brexit may create opportunities too. It could result in the housing market cooling and resetting in areas where house price growth has locked out first-time buyers and others that want to purchase property.”

Former RICS chairman Jeremy Leaf was surprised at the results of the index, though he predicted a falloff in transactions because of the Brexit vote.

He said: “The figures are surprisingly strong considering they are for the period post the stamp duty increase and pre the outcome of the referendum.

“They show that the market is more resilient than we might have expected. It shows that make-up of buyer interest was a mixture of investors who brought forward buying decisions as well as first-time buyers and existing home movers. The latter groups still see some value in the market and are taking advantage of very low interest rates.

“The outlook for London is different from the rest of the country because affordability was already stretched and we were already seeing problems for the market due to overpricing and oversupply. More growth is likely to be seen outside the capital rather than inside in future months. Clearly we are going to have to see what impact the referendum vote had on prices and activity in the next set of figures.

“On the ground we are seeing a determination on the part of most customers to get back to as close to normality as possible but a falloff in transactions seems inevitable as buyers and sellers pause awaiting definite signs of change in the market.”