House prices accelerated before Brexit shock, says ONS

Property values were on the up in June, with the average home increasing £17,000 to reach £214,000. Well there is no dispute being a landlord and building a portfolio of properties continues to make more and more sense – Originally posted on theweek.co.uk

House prices accelerated in June despite the uncertainty created by the EU referendum, says a new report.

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The Office for National Statistics’ (ONS) latest house price index reports valuations rose 8.7 per cent year-on-year, up from 8.5 per cent in May.

On a monthly basis, property rose one per cent, adding £17,000 to the average value from the same month last year. The average cost of a UK home is now £214,000.

Unlike some other sector surveys, the ONS index includes both newbuild and cash sales and is a more comprehensive review of the market, notes the BBC.

However, it is also based on completed sales and so says little-to-nothing about the trend after the vote for Brexit.

Evidence from the likes of the Royal Institute of Chartered Surveyors (Rics) suggests transaction volumes and house price growth have declined since the end of June but that prices are still moving positively amid a profound housing shortage.

Richard Snook, a senior economist at PricewaterhouseCoopers, told the Daily Telegraph: “In our main scenario, average UK house property growth will decelerate to around three per cent this year and around one per cent in 2017.

“Cumulatively, our estimates suggest average UK house prices in 2018 could be 8pc lower than if the UK had voted to stay in the EU.”

London estate agent Jeremy Leaf, a former Rics residential chairman, said: “There is no doubt that there is too much concentration on pricing and not enough on transactions.

“Volumes will be affected by uncertainty at least until September… Transactions are more important than headline prices as it is important for the health of the market that people are moving and there is plenty of activity. This has more impact on the economy.”

In terms of the regional trends in the ONS figures, high-value central London areas were shown to be falling ahead of the referendum as successive tax changes hit demand. Kensington and Chelsea and Hammersmith and Fulham saw declines of 6.2 and 3.2 per cent since last year.

Aberdeen, which has been hit hard by a decline in the offshore oil sector, experienced the biggest drop with a slide of 6.8 per cent.

On the other hand prices were seen rising fastest in the Western Isles (up 28.1 per cent), where low volumes make trends volatile, as well as Slough (up 24.6 per cent), Luton (21.8 per cent) and the London 2010 Olympics borough of Newham (21.4 per cent).

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