Despite concerns over Brexit and reports of falling house prices in July, average UK property prices are forecast to increase by 1.5% over the next three months.
The Royal Institution of Chartered Surveyors (Rics) reported a drop in house prices during July. According to Rics chief economist, Simon Rubinsohn, house prices and sales volumes appeared to lose momentum as Brexit and political uncertainty heightened. The Rics report seems to be borne out by Halifax, which also reported falling house prices in July, with the average cost of a home declining by 0.2%, following a 0.4% drop in June.
However, the outlook is not so bleak according to the latest monthly house price forecast from reallymoving, which predicts an increase in UK house prices over the next three months. August is set to see prices rise by 3.2% and although this is expected to drop to 1.4% in September, annual growth will be up 3.1% according to the forecast – the most significant annual increase in house prices since last November.
Half the UK expected to see an increase
While many areas are expected to see property prices climb in the three months to October, with rises of anywhere between 0.8% in Scotland and 7% in the south-east of England, other parts of the UK may see modest slumps – although taking into account the level of uncertainty surrounding Brexit, the outlook is still positive.
Furthermore, many home movers may be keen to complete before the 31 October deadline, and this surge in transactions could also stir up the housing market.
CEO of reallymoving Rob Houghton says: “The outlook for the property market over the next three months is remarkably positive, considering the current political and economic context. The recent election of a new Prime Minister who is committed to leaving the EU on Halloween even if a deal isn’t reached could mean clouds are gathering on the horizon, but any impact on prices in the short term is likely to be mitigated by the urgency of home movers to complete deals in the next three months.
“While the longer-term outlook remains uncertain, we could see a Boris Bounce in the property market if he is true to his word over stamp duty reform and stimulates the market through tax cuts at the top and bottom.”
“Scrapping stamp duty for downsizers could be a cost-effective way to stimulate activity throughout the market, freeing up family homes and enabling chains of transactions, at relatively little cost.”