According to Halifax, UK house prices have dropped for almost six months. The average price of a home in Britain dropped to £225,995 in September, down 1.4% from the level recorded in August.
The consensus is that the uncertainty surrounding the Brexit negotiations is the main contributing factor to the stagnant state of the UK property market. Although there was an initial increase in overseas interest following a weakening of the pound subsequent to the Brexit vote, investors appear to have taken a ‘wait and see’ approach to investing in the UK property market.
London’s property market seems to be the hardest hit. Jonathan Samuels, chief executive of specialist home loans company Octane Capital, warned that: “A Brexit no-deal could hit prices in the capital, especially at the higher end, like a sledgehammer”.
Mark Carney, Governor of the Bank of England, warned that there will be a 35 per cent drop in house prices in three years in the event of a no-deal Brexit.
Other contributing factors include recent stamp duty changes whereby a higher rate of stamp duty is payable on second homes. Additionally, the Bank of England raising the interest rates in August above the emergency level introduced after the financial crisis, to 0.75%, may also be having an impact on the property market.
However, it is not all gloom for the UK property market; some regions have seen some growth. Manchester house prices have experienced a growth of 7% and the Yorkshire market a growth of 5.8%.
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Sumaya Ali, Trainee Solicitor