UK house prices rose in June - but will Brexit hit house prices? Three experts give their view

 
Emma Haslett
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House Prices Are Stagnant In London
House prices edged up in June - but will Brexit do damage? (Source: Getty)

It seems the nation's house buyers were unperturbed at the prospect of a Brexit vote, after new figures showed house prices rose in June - despite warnings by the chancellor.

Figures from Nationwide this morning showed prices crept up 0.2 per cent in June, or 5.1 per cent in the year to the end of June.

That meant the average house price is now £204,968 by Nationwide's measure, up ever so slightly from £204,368 in May.

Read more: Here's how Brexit will affect house prices

It's a sign of the times that 5.1 per cent year-on-year growth is seen as pretty flat - but Robert Gardner, Nationwide's chief economist, said UK house price growth has "remained fairly stable over the past 12 months, confined to a fairly narrow range of between three per cent and six per cent".

“It has become difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of Stamp Duty on second homes on 1 April," he added.

Naturally, he pointed out there is likely to be uncertainty over the coming months, thanks to the B-word.

"It will be difficult to gauge assess how much of the likely fallback in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional stamp duty, and how much is due to increased economic uncertainty following the referendum result," he said.

Will Brexit hit house prices? Experts give their views

Ian Thomas, co-founder, LendInvest

“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.”

Samuel Tombs, chief UK economist, Pantheon Macroeconomics

"Following the referendum, demand likely will weaken as unemployment begins to edge up and confidence falls. Meanwhile, banks soon will reflect the recent increase in funding costs in their mortgage rates. Prices in London... look particularly vulnerable, given that job insecurity has increased in the City and banks will be thinking twice about high loan-to-income lending. Following the Brexit result, we think that demand will soften further, pushing down house prices by about three per cent over the next year."

Alex Gosling, chief executive, HouseSimple

"It does feel like the calm before the storm. Just how violent that storm is going to be is like most things at the moment - uncertain. If the labour market remains robust and lending conditions don't deteriorate, then there's no reason to think we can't navigate through these choppy waters. Any drop in purchases in the shorter term will be counterbalanced by the continued lack of supply, which should prop up prices. How London fares could be crucial to the longer term health of the housing market.

"The worry is that foreign investors will run for the hills, and if the capital's property market stalls, that contagion could quickly spread to the rest of the country."

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