House prices rising faster than expected 'but may not yet reflect Brexit'

The Nationwide says house prices rose at their fastest annual rate for four months in July, but that performance may not reflect the impact of the Brexit vote. 

"The outlook remains unusually uncertain and it may take several months for the underlying trends to become evident" warns Nationwide economist Robert Gardner.

His monthly index shows average prices across Britain rising 5.2 per cent in July compared to 5.1 per cent in June. The average home is now valued at £205,715.

Nationwide says its figures are based on property prices at the time when buyers are offered mortgages - so the July index would largely contain pre-referendum data. 

A fall in consumer confidence since the referendum might be a sign of weakness to come in the housing market but prices could hold up if sellers decide to take their properties off the market, Gardner says.

"Determining how much of any fall-back in activity is the result of the tax changes and how much is due to the referendum will be difficult" he admits. 

Meanwhile the National Association of Estate Agents says figures from immediately after the referendum vote do show a slump in business - but this may not last. 

The NAEA says “instantly following the Brexit result, 57 per cent [of member agents] reported a drop in demand from prospective buyers and 58 per cent saw supply fall in the week immediately following the vote. However, it is expected this will level out in July.”