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Reviewing the UK housing market

The UK housing market is incredibly fluid and could never be described as a homogenous mass.

By that, I mean it’s very difficult to review a ‘UK housing market’ because, lets be honest, there are great swathes of differences, not just between individual countries, or counties, or towns, but often within very small areas. The market for one street can be very different to the next.

This can make the whole notion of property value very difficult to get right. For instance, I read research from the Principality Building Society suggesting that the average house price in Wales has reached a record high of just over £191,000, with quarterly and annual house price growth up by over 2%.

In that regard, different regions across the country appear to be bucking the London/South East trend – I’ve heard a large amount of anecdotal evidence from brokers active in these regions that prices over the last 12-18 months have taken a serious hit, due to a number of factors, not least the impact that increased stamp duty charges are having on the sale and purchase of £1m-plus houses.

Indeed Rory Joseph of JLM Mortgage Services, recently talked about some of their clients who three years ago saw their neighbours selling their homes for £1.5m, and now when they are being put on the market, estate agents are advising a sale price of nearer to £1m.

You can therefore see how things can change in a relatively short space of time, plus when you add in the potential impact of Brexit negotiations during that period and look at what might happen next, who is to say how house prices might move?

Regionally, however, we appear to be seeing greater growth in prices in areas outside the South East of the country, and some might say this has been long overdue.

The gap between these regions has often been incredibly large, but perhaps not so now, and it’s perhaps therefore no surprise to see landlords much more inclined now to purchase in areas beyond the South East because of the perception they can get more for their money and can also secure a greater rental yield.

This decision obviously requires a large degree of due diligence on the part of the landlord, especially if they are unfamiliar with a locale.

The fast-changing nature of house prices however also needs to be reviewed and analysed by all housing market stakeholders in terms of the valuation of properties.

We’ve certainly seen a growing number of down-valuations coming back from our own valuers when it comes to properties which we are being asked to lend against, and clearly if that initial valuation, either by landlord, adviser, or agent, is off the mark, then this can cause some significant issues when it comes to making the lending decision in a positive way.

We understand that ‘down valuations’ are incredibly frustrating for all, but there is a reason why we use independent valuers in this market, and we are not simply working off estate agent estimates. In that sense, we would ask advisers and their clients to be aware of what might happen during the valuation process and pre-empt that by being realistic about what the property’s real value might be.

Some might believe that valuers are ‘making it up as they go along’ or ‘the house down the street went for more than this just a few months ago’, but let’s not forget that the valuation we require has to be evidenced-based.

This is not just a case of sticking a finger in the air because there is a large degree of liability for that valuer should it be judged, for instance, that they have over-valued a property.

As RICS have been at pains to point out: ‘The market value is based on comparable market evidence, which is usually confirmation of a minimum of three sales transaction of similar types of properties in the local area, and also the professional’s knowledge of the local market including supply and demand dynamics.’

Now, I fully understand that agents may well argue that their knowledge of the local market is second to none, however it’s their job to get the best price for their client, whereas the valuer works on behalf of the lender or provider, and therefore that agent ‘asking price’ might not be accepted as proof positive of the value by anyone else.

Plus, as mentioned above, prices can change quite sharply in different areas and, what might have seemed realistic a few weeks or a month ago, might no longer be the case.

The point is that if there is a healthy degree of realism at the outset, then there’s less likelihood of the valuation coming back as a shock.

As a lender active in this space we always want to make the deal work, but it has to work for everyone, and that means following the result of our independent valuation.

We would like to keep those down valuations to a minimum, but it will require an understanding from all concerned of how valuations work, how their view of the market might be different to others, and an acceptance that we have to accept the valuers’ view.

By Jeff Knight

Source: Mortgage Introducer

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Brexit and the housing market: prices drop and fewer homes are put up for sale

If you’re considering buying a house at the moment, you might want to know what the current, realtime impact of Brexit on the UK housing market is, and whether local house prices are the main thing you should be worried about.

Well, according to the latest Rightmove House Price Index, there’s more to the effects of the current political situation than the downward trend in house prices that we’ve been seeing. More on that in a minute.

First things first: it is true that Brexit is continuing to drag house prices down, especially in London and the South East, and in particular where it comes to bigger and top-tier properties.

On average, London properties are 2.1 per cent cheaper this September than they were the same time last year. By contrast, asking prices in the first-time buyer sector have actually increased by 0.6 per cent compared to August.

However, the far starker effects can be seen in the supply figures – in other words, how many properties are up for sale. Many people are holding off putting their homes on the market, with the number of newly listed properties down by a huge 7.8 per cent this September compared to a year ago.

This scarce supply is having a knock-on effect on would-be movers, many of whom are now unable to find suitable properties to move on to. The situation is much more severe in London, where the number of newly listed properties has fallen by a massive 20 per cent.

‘All regions are down on their numbers for both sales agreed and properties coming to market,’ comments Rightmove director Miles Shipside. ‘Some regions are just marginally behind the previous year, but they are all seeing less activity in these two key metrics, showing that hesitation is now more widespread rather than being localised to just some parts.

‘However, some of that will be due to difficulty in finding the right property to buy, as activity still remains brisk in some locations, evidenced by continuing upwards pricing pressure in some parts of Great Britain. Uncertainty is clearly not just about the political situation, with finding the right property to buy being a bigger worry for many.’

The takeaway from these stats is that if you’ve found a property you like and are in a position to buy, now is not the time to hesitate. You can read more about why Brexit shouldn’t stop you moving house in the news piece we published earlier this week. Our advice? Use the autumn lull to your advantage and negotiate a good price, if you can find a property you like.

BY ANNA COTTRELL

Source: Real Homes

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Housing market off to ‘subdued’ start in 2019

The Royal Institution of Chartered Surveyors (RICS) has described the housing market as ‘subdued’, noting that new buyer enquiries fell in January for the sixth successive month.

In its latest residential market survey, the trade body confirmed that demand declined to some degree across almost every region in the UK, with Scotland the only exception. Even north of the border however the trend was flat.

A drop in demand has been accompanied by a fall in new listings also, to the weakest level seen since July 2016, while agreed sales fell further as well.

What’s ahead?

The RICS survey found that sales expectations are negative for the next three months both nationally and across most parts of the UK, though surveyors are positive in expecting sales to rise over the next year.

Prices are expected to continue to slip, with London and the south east subject to the most negativity from surveyors. RICS noted that these regions have seen strong house price growth in recent years, making them less affordable.

A mixed picture for landlords

The survey revealed a mixed picture for the lettings market. While demand picked up modestly, for the third straight quarter, new landlord instructions fell for the eleventh successive quarter.

Surveyors expect rents to increase by around 2% over the next year.

Simon Rubinsohn, chief economist at RICS, noted that while some respondents had enjoyed a stronger start to the year than anticipated, the majority were continuing to find the market a tough one in which to do business.

“Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market, although whether that will be sufficient in London and parts of the south east where affordability remains stretched and the tax changes are most penal remains to be seen,” he added.

Source: Your Money

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Housing Market Cools shows RICS Data, but UK House Prices Forecast to rise 2% Next Year by one Economist

The housing market is creaking, Royal Institute of Chartered Surveyors (RICS) data showed on Thursday, as homeowners increasingly hold off on selling while affordability issues keep many prospective buyers on the sidelines. However, one economist tells us the fog of Brexit that clouds the sector should lift and we can expect house prices to grow in 2019.

The RICS house price balance came in at -19% for December, down from -11% previously and much lower than the economist consensus for a -13% reading in the final month of 2019. That is a fourth consecutive negative reading.

The balance represents the percentage of surveyors who reported seeing prices increase on their patch during the recent month relative to those who reported declines. A number above 0% means more surveyors saw prices rise, and vice versa. It is derived from survey responses.

“It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued,” says RICS chief economist Simon Rubinsohn.

Buyer enquiries, new sale instructions and the number of sales agreed all declined during December, on average at the national level. The average number of properties available for sale at individual branches of estate agent has fallen to just 42 of late, close to a record low.

The number of new sale instructions declined for sixth consecutive month in December, which the RICS attributes to uncertainty over the impact Brexit will have on prices, while new buyers enquiries fell for a fifth consecutive month albeit at a lesser pace than in November.

December’s sales volumes balance was -11% which, although up from -15% previously, marks a continuation of a long and negative trend. London and the Southeast led the downturn in transactions, while some other parts of the UK actually saw a pick-up.

The data from RICS comes on the same day the Bank of England reports a sharp decline in demand for mortgages in the final quarter of 2018.

In their Credit Conditions Survey for the fourth quarter of 2018, the Bank says, “lenders reported that demand for secured lending for house purchase decreased significantly in Q4, and was expected to decrease further in Q1.”

housing market

“The housing market still is in the doldrums,” says Samuel Tombs, chief UK economist at Pantheon Macroeconomics. “Surveyors clearly think that Brexit uncertainty is to blame.”

The prices balance was -19% for December, down from -11% previously, marking a fourth consecutive decline and the worst reading for this component of the survey since since the height of the Eurozone debt crisis in August 2012.

Expectations for prices in three months time were almost as dire as the transaction data for December. Surveyors in all parts of the UK now anticipate that prices in their area will stagnate or decline over the next three months.

housing market

Above: RICS graph showing surveyors’ price expectations.

The three-month balance of sales expectations was -28% for December, the poorest reading since the survey began back in 1999. However, on a 12-month basis the outlook is a bit brighter.

A majority of surveyors anticipate that house prices will rise over the next 12 months, with both RICS and independent economists linking this to the timeline of the Brexit process. By January 2020 the UK’s path out of the European Union should be clearer, if the country departs the bloc at all.

“We continue to think that Brexit uncertainty will subside soon, as the government is forced to pivot towards a soft Brexit with only limited economic consequences; that shift, in turn, should help consumers’ confidence to recover and restore some life to the housing market. Nonetheless, the MPC will have to start raising Bank Rate at a faster rate than in recent years soon,” says Tombs.

Tombs forecasts that UK house prices will rise by only 2% on average in 2019 thanks toBank of England (BoE) interest rate policy, which is expected to exacerbate affordability challenges by pushing up the cost of mortgages.

The Bank of England is widely expected to raise interest rates again in 2019, taking the bank rate up to 1% and marking a third increase since November 2017. It could move as soon as April, although the exact timing of any hike will depend on the outcome of the Brexit process.

housing market

Above: Pantheon Macroeconomics graph showing historical price changes.

Source: Pound Sterling Live

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Brexit uncertainty is continuing to kill house prices

The housing market is continuing to take a hit as Brexit uncertainty wages on. Property prices have seen a monthly marginal drop, according to the latest UK House Price Index (HPI) released on Wednesday.

Property prices across the nation fell by 0.1% between October and November 2018, according to the HPI’s monthly estimates, based on sales data from the HM Land Registry, Registers of Scotland and Land and Property Services Northern Ireland.

In England, the average house price fell by 0.1% between October and November, with the regional data showing the North East saw the greatest monthly price rise of 1.3%, while Yorkshire and the Humber saw the most significant drop, down by 1.3%.

But it’s not all doom and gloom — the HPI also shows that UK property prices have risen by 2.8% over a year. Prices in England grew by 2.6%, taking the average property value to £247,430, and data shows the West Midlands saw the greatest price rise of 4.6%.

Things continue to look bleak in the capital, however, as London house prices saw the biggest price fall of 0.7%. House prices in the capital have been falling month-on-month since July 2018.

The report also revealed that there were 419 repossession sales in England in September 2018. The lowest number of repossession sales was in the East of England, where there were only seven, while the highest was in the North West, where there were 98.

Things look better in Wales, where property prices are on the up, rising by 0.2% since October and 5.5% over the year, taking the average property price to £161,499. There were 39 repossessions for sale in Wales in September 2018.

Andy Solomon, property expert and CEO of internet marketer Romdel, said: “If the relative calm before the storm has brought out a further reduction in house prices, transaction levels and buyer interest, one must wonder what the forecast will be now the political headwinds have hit gale force level following yet another disastrous Brexit vote.

“We will no doubt see many buyers and sellers batten down the hatches until further notice, but once stability does return, it won’t take much for the UK property market to dust itself off and activity to pick up once again. The question is, how much damage will have been done before we reach this point and how long will it take to rebuild?”

Source: Yahoo Finance UK

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The UK’s house price boom is slowing: and that’s welcome news

Britain’s passion for rising house prices is both strange and irrational because by any yardstick a surging property market is bad news. It makes people feel wealthier than they actually are and so encourages them to take on more debt than they can afford. It diverts investment from more productive uses. It helps those who own housing assets at the expense of renters. And for every boom there is a reckoning, often extremely painful.

As a result, there are two possible responses to the forecast from the Halifax that house prices will rise by 2-4% in 2019. One is to treat only modest house price inflation as some sort of national tragedy. The other is to hope that Britain’s biggest mortgage lender has got it right. Response number two is the correct one.

What’s happening in the residential property market has nothing really to do with Brexit – not yet, at least. Clearly, a disruptive, unplanned departure from the European Union at the end of March would have serious consequences, which is why the Bank of England has stress-tested the high street banks to see whether they could cope with a 30% drop in house prices.

But the reason house price inflation has been moderating in 2018, and is likely to remain modest in 2019, is really an inevitable correction to the overblown market conditions in the middle of the decade. Record low interest rates, freshly minted money courtesy of the Bank’s quantitative easing programme, subsidies to homebuyers provided by the Treasury’s help-to-buy programme, a rising population and very low levels of housebuilding combined to provide the perfect conditions for a boom.

All the usual things happened. A rising property market generated a feelgood factor. Property owners spent more, with knock-on effects for the rest of the economy. Imports went up, leading to a widening trade deficit. And the next generation of first-time buyers was squeezed out of the market.
In the past – in the early 1990s, for example – rising interest rates have brought property bubbles to a rapid and painful end. This time, though, the Bank kept official borrowing costs low, which meant the UK avoided the negative growth and longer dole queues that in the past have led to falling house prices.

Potential housebuyers found prices far too high, even with mortgage rates low. But with employment at record levels, sellers found themselves under little pressure to drop excessively high asking prices. The upshot has been a standoff that has seen low levels of activity and houses only gradually becoming affordable.

This process is far from over. Houses will become more affordable as asking prices come down and earnings pick up, but this is going to take time. In London and the south-east, it is still almost impossible for a first-time buyer to raise the necessary deposit unless they have the facility to make a cash withdrawal from the bank of mum and dad.
If anything, the Halifax forecast looks to be a tad high. The economy has slowed since the summer and the Bank of England is sufficiently worried about inflation to be considering raising interest rates if there is a smooth Brexit. A more likely outcome is that house prices will move sideways during 2019.

This, though, would be a good outcome. If house prices crash it will be because the economy is in recession, unemployment is going up, mortgage arrears are mounting and home repossessions are soaring. If house prices stay where they are or even fall gently, it will mean that an unsustainable boom has ended in a rare soft landing. Small energy suppliers have the power to recover from a bad press

The energy industry likes to point to the market’s 70-plus suppliers as a sign that the sector is thriving and competition flourishing. But there is no masking the fact that this has not been a good year for the image of challenger firms.

The price increases of the big six – British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE – still rightly command negative headlines, given how many households they affect. However, the reputation of small suppliers jostling to unseat them has been tarnished, not least after eight collapsed this year.

That matters because the cost of picking up the pieces is borne by all energy consumers. As the former chief regulator Stephen Littlechild has pointed out, “prudent suppliers” and their customers are bailing out the “imprudent ones”.

Small suppliers have also topped the tables for worst customer service. Several of these, such as Iresa and OneSelect, have since gone bust.

It emerged this week that five of the biggest price increases this year came from small players. The worst was Economy Energy, which incredibly put up customers’ bills by 38%, or £311 a year, in a single blow.

Concerns over challengers’ viability and service have led Ofgem to consider tougher rules for new entrants. That is a welcome move but it would be a mistake to buy into a big-six-friendly narrative that tars all small suppliers with the same brush. The truth is that while there are some bad apples in the basket of challengers, they nestle among the finest in the market.

Small and medium suppliers offer the best prices, service and choice, be it renewably powered, publicly owned, time-of-use tariffs, app-only, you name it. As the big six get hammered by the price cap next year, let’s hope that small becomes beautiful once again. HMV’s troubles could soon sound like a broken record for the retail industry

Happy Christmas? HMV is calling in administrators and the next two or three weeks threaten to be a litany of doom for the retail industry.
Next is set to kick off the annual festive trading statement season on 3 January, but fears remain that names such as Debenhams, Marks & Spencer or Mothercare may have to issue a profits warning early next week after poor seasonal trading.

It is a tense time for Debenhams, where the retailer’s major shareholder, Mike Ashley’s Sports Direct, is poised to capitalise on any further financial distress. Ashley is no doubt keen to find a way to prop up recent purchase House of Fraser, which is sharing Debenhams’ pain in tough clothing, beauty and homewares markets.

Unseasonably warm weather, a general slowdown in spending on “stuff”, a lacklustre housing market and the uncertainty of Brexit have combined with increased competition from online specialists such as Boohoo, FeelUnique and Cult Beauty to put department stores on the rack.

The likes of Mothercare, FootAsylum, John Lewis and Dixons, the owner of PC World and Carphone Warehouse, face similar pressures.

M&S and Next largely stuck to their tactic of holding off on major price cuts until late December. It will become clear if ducking the festival of discounting across the rest of the high street paid off in profitable sales or lost them a big chunk of market share. It’s possible that they benefited from holding firm until the surge in trading in the last three days before Christmas.

It’s clearly been gloomy on the high street, with the number of shoppers down on last year.

But the biggest battle has been played out less visibly, with delivery vans and parcels. HMV’s troubles highlight the online onslaught. With all retail sales growth online, the next few weeks will reveal which retailers grabbed a slice of that action and which are lost in the post.

Source: Gooruf

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Halifax predicts stability in the market next year

Halifax has predicted broad stability anticipated in house prices next year with between 2% and 4% price inflation, though this is dependent on the Brexit outcome.

The Halifax UK Housing Market Outlook for 2019 also predicted shortage of homes for sale and low levels of housebuilding will continue to support high prices, constraining demand.

Russell Galley, managing director, Halifax, said: “The housing market in 2018 followed a similar trend to recent years. In line with our expectations, house price growth slowed whilst building activity, completed sales and mortgage approvals all remained relatively flat.

“This was driven by a combination of continued uncertainty regarding the future growth prospects of the UK economy, and the ongoing challenge faced by prospective buyers in building up the necessary deposits.

“Looking ahead, aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes.

“Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be pushed significantly in either direction.”

The outlook found housing market performed in line with expectations over the past year, at the lower end of our forecast 0% to 3% growth.

Galley added: “Despite current political upheaval, and on the basis that it is still most likely that the UK exits the EU with a form of withdrawal agreement and transition period, we expect annual house price growth nationally to be in the range of 2% to 4% by the end of 2019.

“This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, the uncertainty around how Brexit plays out means there are risks to both sides of our forecast.

“Longer term, the most important issue for the housing market remains addressing the affordability challenge for younger generations through more dynamic housebuilding.”

Source: Mortgage Introducer

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Lethargic, but there’s life yet in the housing market

The national housing market is running out of puff. But there are still plenty of regional bright spots.

“Lethargy is replacing energy” in the property market. These were the cheery words of a former chairman of the Royal Institution of Chartered Surveyors (Rics) in reaction to Halifax’s latest house-price index. In the three months to November, house prices were 0.3% higher than in the same three months a year earlier, with the average cost of a home now £224,578. This is down from the 1.5% annual growth recorded in October, and the lowest rate of growth since December 2012.

But while this isn’t exactly a ringing endorsement of the state of the UK housing market, it’s important to look beyond the inevitably gloomy headlines. In the 12 months to September, the parts of the UK that saw the biggest drops in house prices were both in London – in Kensington & Chelsea and Westminster, with annual drops of 9.9% and 6.3% respectively.

The areas with the strongest growth were the Forest of Dean and Burnley. In both places, house prices rose by approximately 10.5%, according to figures from estate agent Savills. They were followed closely by Stirling, with a 10% increase.

London leads the decline

With house-price growth at its lowest rate in six years, the overall market as a whole is certainly sluggish. In cities and major towns across Britain, properties are taking longer to sell, sitting on the market for 102 days, which is six days longer than in 2017, according to the Centre for Economics and Business Research.

Moreover, the average number of sales per surveyor has fallen fallen to 14.1 across a three-month period, the lowest it has been since 2009, says Savills, drawing on data from Rics. However, it’s useful to acknowledge the extent to which the wider market can be brought down by price falls in the southeast, which has been overvalued for a long time.

Of the 20 cities monitored by the Hometrack UK Cities House Price index, prices fell year-on-year by 0.4% in London and 1.1% in Cambridge. Yet prices were up 7.7% in Leicester, 7.4% in Edinburgh, and around 6% in Manchester, Birmingham, Nottingham and Liverpool.

Leave Brexit out of this

There’s also been a lot of discussion of the idea that the UK market is struggling because people looking to buy are biding their time on Brexit. Yet there’s actually “little evidence that Brexit uncertainty has led to pent-up demand in the housing market”, says consultancy Capital Economics. If it has dampened transactions, the effect has been “minor”. Since the referendum, housing transactions have averaged 100,000 per month. That’s down only a little, relative to the average of 102,000 seen over 2014 and 2015.

There is obviously a case for suggesting transactions might have gone up if we hadn’t voted to leave the EU, acknowledges Capital Economics. But “a multitude of non-Brexit related factors have been weighing on activity in recent years”.

These include higher stamp duty for second homes, lower mortgage interest tax relief, and rising interest rates driving up the cost of borrowing. “So even if a Brexit deal is struck, we see little prospect of a rise in housing transactions next year.” Now is not the ideal time to sell your London home. And the stagnant number of transactions is hardly encouraging for estate agents and surveyors. But for most of the UK, the housing market is actually holding up reasonably well.

Source: Money Week

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The North West and Scotland have the best rental yields

The North West is the top hotspot for rental yields with an average yield of 5.4%, followed by Scotland with 5.3% and Yorkshire and the Humber with 4.9%, Shawbrook Bank has found.

Lower property prices mean it is easier to achieve better rental yields and the city is attracting students and employees from all around the country. The average UK house price is currently £228,000, which is 43% higher than the average house price in the North West – £159,000.

Emma Cox, ‎sales director for commercial mortgages, said: “Landlords have had a rough ride over the past few years with multiple tax changes, but our research shows that it’s not all doom and gloom for potential investors in 2018.

“Lower rental yields in London and affordability constraints for investors has driven interest North, where borrowers are chasing the yield and heading to locations with lower average house prices.

“There are still interesting times ahead for savvy investors and good investment opportunities remain.

“However, when landlords invest far away from their home turf, they can run the risk of falling foul to local knowledge.

“Smarter local investors may be seeing an opportunity to divest themselves of their less desirable housing stock, so it’s important for buyers to do their research to make sure they understand the local supply and demand before investing.”

The ‘UK Buy to Let’ report, produced by Shawbrook Bank and compiled by the Centre for Economics and Business Research (CEBR) has predicted annual property price inflation to be more subdued in the five years up to 2023 than over the last few years.

The report forecasts average annual house price predictions for the years 2017 to 2023 to be at 4.5%, compared to an average of 7.0% for the high-growth years of 2014 to 2016.

Stretched affordability ratios, years of weak wage growth and the prospect of further interest rate rises all weigh in on the outlook for house prices in the UK for the next few years.

House price growth has slowed in the capital particularly, with Brexit and the resulting uncertainty regarding the future of the financial services sector in the City of London looming over activity in the prime end of the market as have higher stamp duty land tax rates.

The report expected price growth in London to continue to trail behind the rest of the country for the next two years.

Furthermore figures from estate agent Aston Chase already show the percentage of high-end purchases from overseas in London’s most expensive postcodes dropping from 44% in 2016 to 35% last year.

Source: Mortgage Introducer

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UK house prices fall sharply in September amid Brexit wariness

According to mortgage lender Halifax, house prices in the UK dropped unexpectedly for nearly six months in September, as the number of homes for sale this year dropped to a decade low.

The country’s largest mortgage lender said that the average price of a home in the UK dropped in September to £225,995, a reduction of 1.4% from the average reported in August. Property prices still remain 2.5% higher than they were a year ago.

City economists had anticipated month-on-month expansion of 0.2% last month.

The most recent overview of the UK housing market, taken only six months before Britain leaves the EU, indicates reduced levels of demand for homebuying amid the political uncertainty created by Brexit.

Economists responded that the picture presented by Halifax concealed some regional variations. Although Brexit property prices in London are dropping for the first time since 2009, prices elsewhere are going up.

They also warned that the Halifax house price index is more subject to change than other residential property barometers because it is done every month.

Earlier this week, the Prime Minister announced that the British government would raise the cap on the amount that local councils can borrow to build homes, which can help increase the number of homes produced by local authorities.

Many people are being priced out of the market by high average property prices relative to household incomes, which in turn is impacting the rate of Brexit property price growth. The Bank of England has also started to slowly raise interest rates, which in turn causes mortgage costs to go up.

Pantheon Macroeconomics chief UK economist Samuel Tombs said that not many British households believe that housing is a wise investment at the moment.

Mr. Tombs explained that the combination of heightened economic uncertainty and growing mortgage rates will impact demand in the months leading up to Brexit, ensuring that house price growth barely passes zero on a year-over-year basis.

Source: CRL