UK property market value falls £27bn as Brexit hits consumer confidence
New research released by property website Zoopla revealed a £27bn slump in the total value of the UK property market. Collectively worth £8.2 trillion, UK homes experienced an average decrease of £927 each in value between Jan 1 and June 30 in 2018. With the total worth of the market down 0.33 percent, the development is mainly attributed to the uncertainty brought on by Brexit as well as the stagnation in house prices.
With prices rising by 3.31 percent, the North East of England emerged as the best-performing region in the first half of the year, followed by Wales with growth touching 1.4 percent. Whereas in London, despite reports of slowing house price growth, the capital’s property collectively rose in value by an average of 0.75pc in the six months to June 30.
The South West of England was identified as the worst-performing region with a 2.51 percent decline in value of the housing market. Closely followed by Yorkshire and the Humber and the East Midlands, with value declines of 2.12 percent and 1.22 percent respectively.
The trend brings to light testing times for the UK housing market. April figures released by Nationwide revealed that house prices were growing at 5 percent a year before the generation-defining Brexit vote, post which, growth has stagnated, consistently hovering at or near 1 percent in 2018.
The latest survey from the Royal Institution of Chartered Surveyors further revealed a decline in the number of agreed sales for the sixteenth month in a row, indicating that conditions may not necessarily improve for the UK property over the coming months.
The resilience of the UK property market depends to a great extent on the country’s economic health. Consequently, if the current trends relating to the weakening pound, surging inflation and forecasted hikes in interest rates continue, the potential for a growth in house prices may not prove to be viable. Correspondingly, if Brexit negotiations are successful, these may bode well for future economic growth, besides improving consumer confidence and house prices may defy current forecasts to increase at a faster rate.
Lawrence Hall, spokesperson for Zoopla, expressed his lack of surprise at the figures, and added: “Uncertainty around Brexit is a very real factor in the market, however on the positive side; the drop is creating a potential opportunity for first time buyers to get a foot on the ladder in some regions across Britain.”