A new analysis of house prices in the UK suggests that Brexit has had an effect, two years on since the country voted to leave the European Union.
Average monthly house price growth since the referendum is 0.26%, slower than the 0.33% a month on average in the months following the economic crash of 2007 while prices recovered to their pre-crash peak.
It is also slower than the 0.5% a month on average between the recovery to the pre-crash peak and the Brexit vote, according to the research by hybrid estate agent Emoov.
In the two years leading up to the UK property bubble bursting, UK house prices grew at an average of 0.80%. When the market crashed at its peak of £190,032 in September 2007, house prices fell by 1.03% a month on average over the next 19 months until they bottomed out at £155,852 in April 2009.
House prices then took over five years to recover to their pre-crash peak at an average rate of 0.33% a month, before increasing to 0.5% from August 2014 to the Brexit vote at the end of June 2016. Between the end of the market crash and Brexit vote as a whole, average monthly price growth was at an average of 0.4%.
However, since the decision to leave the EU, average monthly house price growth has slowed to just 0.26% a month as continued uncertainty around our exit has left market activity subdued.
‘There is no doubt that the decision to leave the EU, and the shambolic handling of the exit process, has seen UK house price growth slow,’ said Russell Quirk, chief executive officer of Emoov.
He explained that there are some positives, for example, the housing market has not reset in terms of property values and so despite a slower rate of growth, UK home owners are still better off now than they were pre-Brexit.
‘It’s also important to note that because prices have remained at an inflated level, the rate of growth is always likely to trail the market crash and because there has been no meaningful fall in values despite the market wobbling in the face of political uncertainty, any period of lethargy is likely to be far shorter than the five year recovery period that followed the 2007 market crash,’ he added.
