Brexit, what Brexit? The property market defied the uncertainty of the EU referendum result – for now – new data reveals.
The full impact on the housing market has yet to be felt as prices edged up ever so slightly in July, according to Nationwide.
Property prices across the UK inched up 0.5 per cent on the previous month and yearly growth came in at 5.2 per cent, just 0.1 percentage point higher than the same month last year.
The full effect of Brexit is yet to be felt, Nationwide's chief economist Robert Gardener warned, however.
“This is the first month’s data following the EU referendum. However, it is important to note that, in constructing the index, we use data at the mortgage offer stage – this means any impact from the vote may not be fully evident in July’s figures, as there is a short lag between a buyer making the decision to purchase a property and applying for a mortgage."
The monthly house price index also noted a traditionally softer summer period for property sales, particularly in the light of a surge earlier in the year as buyers rushed to avoid the new stamp duty charges.
Gardener said: “In the near term, increased economic uncertainty may lead to weaker demand for homes. Leading indicators are consistent with softening ahead."
"Household confidence fell sharply in the wake of the referendum result, especially attitudes towards making major purchases, which in the past has correlated with mortgage activity, though less closely in recent years (see chart below).
In the run up to the vote the Royal Institute of Chartered Surveyors (RICS) reported declines in new buyer enquiries and expectations of weaker price growth amongst surveyors, though these trends predate the vote and are likely to have been impacted by the recent tax changes as well as the referendum."
The average price of a property in the UK now stands at £205,715, up from £204,968 in June.
Commenting on the figures, London estate agent and former Rics residential chairman Jeremy Leaf said:
"The housing market showed considerable resilience in the uncertain period leading up to the Referendum.
"It is too early to say how much of an impact the decision to leave the EU has had but since the vote on the ground we are seeing buyers and sellers negotiating much harder to ensure they are doing business.
"This has inevitably led to some softening in prices in areas where affordability is most stretched."