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| House prices rose before the EU referendum, Nationwide survey shows | House prices rose before the EU referendum, Nationwide survey shows |
| (3 days later) | |
| Annual house price growth rose to a three-month high in June as Britons headed to the polls to vote on whether the UK should stay in the EU. | Annual house price growth rose to a three-month high in June as Britons headed to the polls to vote on whether the UK should stay in the EU. |
| House prices edged up by 0.2 per cent in June, up 5.1 per cent in 12 months. This was an increase on house prices rising 4.7 per cent in the year to May. | House prices edged up by 0.2 per cent in June, up 5.1 per cent in 12 months. This was an increase on house prices rising 4.7 per cent in the year to May. |
| The average cost of a home in the UK is now £204,968, according to Nationwide, compared to average annual earnings of £27,600 according to the Office of National Statistics. | The average cost of a home in the UK is now £204,968, according to Nationwide, compared to average annual earnings of £27,600 according to the Office of National Statistics. |
| Strong labour market conditions, with unemployment at an eleven-year low, combined with a record low number of properties on estate agents' books were seen by Nationwide to be supporting the housing market. | Strong labour market conditions, with unemployment at an eleven-year low, combined with a record low number of properties on estate agents' books were seen by Nationwide to be supporting the housing market. |
| However, the report highlights the increasing chasm between the London market and the rest of the UK. Outer London boroughs were already experiencing strong growth of 12.4 per cent in the first quarter of the year. | However, the report highlights the increasing chasm between the London market and the rest of the UK. Outer London boroughs were already experiencing strong growth of 12.4 per cent in the first quarter of the year. |
| Overall, London experienced rapid growth of 9.9 per cent with average prices reaching an all-time high of £472,384, 54 per cent above 2007 crisis levels and 12 times average earnings in the capital. | Overall, London experienced rapid growth of 9.9 per cent with average prices reaching an all-time high of £472,384, 54 per cent above 2007 crisis levels and 12 times average earnings in the capital. |
| Meanwhile, properties in the North of England, Wales, Scotland remain 9 per cent below their 2007 peak. Wales, Scotland and Northern Ireland experienced modest gains in the quarter but also remain below their peak. | Meanwhile, properties in the North of England, Wales, Scotland remain 9 per cent below their 2007 peak. Wales, Scotland and Northern Ireland experienced modest gains in the quarter but also remain below their peak. |
| Commenting on the figures, Robert Gardner, Nationwide's chief economist, said it was "difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of stamp duty on second homes on 1 April.” | Commenting on the figures, Robert Gardner, Nationwide's chief economist, said it was "difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of stamp duty on second homes on 1 April.” |
| Gardner predicted a fallback in transactions over the coming months after buy-to-let investors rushed to buy before the deadline. | Gardner predicted a fallback in transactions over the coming months after buy-to-let investors rushed to buy before the deadline. |
| How much of this can be attributed due to the changes and how much attributable to other uncertainties such as Brexit and fears over an overheated market is difficult to gauge, Gardner said. | How much of this can be attributed due to the changes and how much attributable to other uncertainties such as Brexit and fears over an overheated market is difficult to gauge, Gardner said. |
| Analysts are sharply divided on the direction of the market in the coming months. Estate agent Foxtons issued a profit warning on Monday, citing the referendum result as a concern. | Analysts are sharply divided on the direction of the market in the coming months. Estate agent Foxtons issued a profit warning on Monday, citing the referendum result as a concern. |
| “The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty.” | “The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty.” |
| Howard Archer, chief economist at IHS Global Insight said, “Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK’s vote to leave the EU. This is likely to weigh down markedly on economic activity and consumer confidence, which is not good news for the housing market.” | Howard Archer, chief economist at IHS Global Insight said, “Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK’s vote to leave the EU. This is likely to weigh down markedly on economic activity and consumer confidence, which is not good news for the housing market.” |
| Retail investors have also been pulling money out of UK property funds according to reports. | Retail investors have also been pulling money out of UK property funds according to reports. |
| Brexit means bargains for overseas purchasers | Brexit means bargains for overseas purchasers |
| Meanwhile, others have suggested that the referendum result may have provided a surprise boost to the London market, which is far more reliant on foreign investors. | Meanwhile, others have suggested that the referendum result may have provided a surprise boost to the London market, which is far more reliant on foreign investors. |
| Estate agents have reportedly been swamped with calls from Chinese, Middle Eastern, Italian and Spanish buyers looking for a bargains as the pound has plummeted after Thursday’s shock result. | Estate agents have reportedly been swamped with calls from Chinese, Middle Eastern, Italian and Spanish buyers looking for a bargains as the pound has plummeted after Thursday’s shock result. |
| Mortgage rates also recently hit an all-time low, with the first 100 per cent loan-to-value deal since the 2008 crash fuelling fears of a bubble. | Mortgage rates also recently hit an all-time low, with the first 100 per cent loan-to-value deal since the 2008 crash fuelling fears of a bubble. |