The not so good news? According to Robert Gardner, Nationwide’s Chief Economist, much will depend on how broader economic conditions evolve. He explained that: “In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows.” But there is certainly still room for optimism, as Robert added: “If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick-up through next year. “The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.”
Certainly, one might suggest that today’s figures support the premise that whilst property prices and buyer demand have both suffered in the capital and parts of its commuter-belt of late, the continuing boom in other areas of the country suggests that not all would-be movers are feeling as nervous.
Todays data was met with measured enthusiasm – albeit with perhaps a bit of surprise – by many in the industry, who pointed to the fact that the property market is still, broadly speaking at least, so far flying in the face of fears of a downturn due to the still as yet unresolved terms of the UK’s exit from the EU next spring.
Brian Murphy, Head of Lending for Mortgage Advice Bureau commented: “The figures suggest that the average annual rate of growth has increased this month, a reversal of the picture from October, meaning that values have returned to forecasted levels after a slight dip last month.”
Brian continued: “Given events so far this year, one might be forgiven for assuming that the property market would, as a whole, have taken quite a battering in 2018.
“However, today’s figures somewhat suggest otherwise; month after month this year consumers have proven that, regardless of the current uncertainties and political climate, if the time is right for them personally to buy a home they are doing so.”
Former RICS Chairman Jeremy Leaf is similarly sanguine, and said: “These figures are better than expected, after unchanged monthly price and lowest annual growth for more than five years last month.
“They come on the back of encouraging mortgage approval and transaction figures yesterday which show, once again, that realistic buyers and sellers are taking advantage of very low mortgage rates and shrugging off Brexit concerns.”
Jeremy also observed that: “These seem to be weighing more heavily on buyers in London and the south east as the old North/South divide is turned on its head with the property market in the capital and its environs now dragging down the rest of the country.”
“Looking forward, we don’t expect any major changes in the period leading up to Christmas unless our departure from the EU is finalised more clearly one way or the other, but there is no doubt we are finding there is considerable pent-up demand awaiting more settled times.”
Clearly, despite some of the more negative Brexit forecasts buyers are continuing to transact, even in the super-prime sector of London.
Data released earlier this week by the Land Registry includes details of a semi-detached property in Kensington and Chelsea that was sold in October for an eye-watering £17,850,000, making it the most expensive residential sale taking place in the month.
But as many top-end estate agents in and around the city will no doubt attest, such deals are thin on the ground at the moment, and have been for some time.
Or as Paul Smith, CEO of national estate agency chain Haart concluded: “We cannot escape the fact that the property market is heavily driven by sentiment. Clearly buyers and sellers are holding off as they wait for greater clarity. If the Government can provide a strong vision of the UK’s post-Brexit future, greater stability and confidence will follow.
“Comments from those such as Mark Carney who downplay the potential market conditions are extremely unhelpful and are hindering the market from reaching its full growth potential.”
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