Brexit clarity allows house price leap - but Brexit uncertainty returns

House prices have risen 2.3 per cent in the past year - the strongest rate of inflation for property since July 2018.

Data from the Nationwide shows the the average UK house price at £216,092 in February, up from January’s £215,897 despite the economy flatlining in the last quarter of 2019.

“While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low. The decisive election outcome may have provided a boost to buyer sentiment” says Robert Gardner, the Nationwide’s chief economist.

However, it’s that word again - Brexit - and it appears a double edged sword.

“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year” cautions Gardner.

“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”

Foxtons is also warning of the potential danger of Brexit uncertainty returning as a market threat.

Commenting on his agency’s latest trading figures, chief executive Nic Budden says: “Our sales pipeline is currently ahead of last year, however we are well prepared for further challenging conditions in the sales market in the run up to Brexit.” 

Nonetheless, many agents have welcomed the Nationwide’s figures.

“It’s not just London based estate agents seeing buyers return in record numbers, Guild agents across the country have reported a post-Brexit surge in activity. For example, according to one agent in Wakefield, properties over £500,000 that had been on the market for some time in the second half of 2019 are suddenly attracting significant interest” says Iain McKenzie, chief executive of the Guild of Property Professionals.

Former RICS residential chairman Jeremy Leaf, who runs his own agency in north London, says: “This is the latest in a series of surveys - and one of the most respected - which confirm what we have seen in our offices, that confidence returned, even before the election. Recovery will only be sustained if stock levels and the pace of sales improve. However, the activity will be short-lived if sellers do not recognise the market remains sensitive and buyers won’t overpay.”

And Marc von Grundherr, director of London agency Benham and Reeves, adds: “It's clear the market has very much found its form. London, in particular, continues to rebound at an astounding rate where house price growth is concerned and while the capital’s property market is on the up, it should take more than a financial penalty at the top end to slow it down.”