The UK’s housing market has stabilised following the initial shock caused by the result of the EU referendum, the latest figures reveal.
Data published by the Royal Institution of Chartered Surveyors (Rics) shows that August witnessed a significant rebound in both confidence and activity across the industry, following a slight lull in July caused by the Brexit vote.
Most sectors traditionally undergo a period of caution following major political developments as people wait to see what the future holds, but any slowdown in the property market has proven to be short lived as prices, sales and expectations have all bounced back strongly.
During August, the Rics survey found that 12 per cent more respondents across the UK reported an increase in prices, which represent a major rise from the 5 per cent who did so in July.
House price expectations over the next three months have also moved into positive territory, with 10 per cent more respondents now anticipating an increase over the period, which marks the strongest sentiment since April this year,
The stability is also reflected in price expectations for the year ahead, with increases anticipated in most parts of the country.
Simon Rubinsohn, chief economist at Rics, said: “There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum. It is likely that the swift response from the Bank of England (BoE) has played a role in helping to support confidence."
In August, the BoE’s Monetary Policy Committee (MPC) moved to stimulate the economy by announcing a cut in the base rate to a historic low of 0.25 per cent.
The announcement had an immediate impact on the mortgage rates of many homeowners – particularly those on tracker mortgages – with lenders moving to reduce repayments in line with the MPC’s decision.
BoE governor Mark Carney also hinted that further stimulus may be introduced in the coming months to maintain the growth – with the next announcement coming on September 15 – and this has also fed into consumer appetite.
The Rics figures follow data published by Halifax as part of its monthly House Price Index, which showed that house prices were 6.9 per cent higher in August than at the same time last year.
On a quarterly basis prices increased by 0.7 per cent, and while there was a 0.2 per cent fall between July and August, this was largely attributed to the uncertainty caused by Brexit and the traditional slowdown in activity in the summer months; something that is expected to be reversed when the September figures are published.
Brian Murphy, from the Mortgage Advice Bureau, said the latest reports provide “a good temperature check” in terms of what surveyors up and down the country are observing.
He added: “This is in line with other data released from lenders, which supports the same point of view that after a deep intake of breath in June, and allowing for the traditionally quieter summer hiatus, the overall market picture for most of the UK is stable.”
The market is also being supported by record-breaking deals on mortgages, with the lowest ever two-, five- and ten-year fixed rate deals launched in recent weeks, sparking a ‘mortgage war’ as lenders vie with each other to attract new customers.
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