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October 02, 2018
As suspected, house prices bounced back in September after falling 0.5% during August, the usual summer lull.
But let’s not kid ourselves. While prices may have nudged up 0.3% last month, the UK’s property market remains sterile at best.
The little annual house price growth there is, is being driven as much by the lack of supply as it is demand. In fact, few would bet against the market staying in the same supply/demand rut for the rest of the year and well into 2019.
A strong jobs market and continued low borrowing rates are keeping transactions ticking over despite pressure on household finances, interest rate uncertainty and the ever-present threat that is Brexit.
There’s no doubt whatsoever that a chaotic Brexit has the potential to hit confidence and the property market for six.
London will be in the firing line if Brexit sees international business and overseas investors steer clear. Over-exuberant house price growth from the recent past has made it even more vulnerable.
For example, while the average UK house price is £214,922, the average cost of a property in the capital is still not far off half a million pounds.
Now don’t get me wrong. The capital’s property market will bounce back from whatever politico-economic events befall it during the course of the next year, but in the event of a chaotic Brexit it could bear the brunt of the pain in the short term.
How long that pain lasts is anyone’s guess. But what you can be sure of is that if there is blood on the streets of the capital, it will create unprecedented buying opportunities.
And if you see an opportunity, we’ll be here - as ever - to help you finance it.
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