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Post Brexit house price rise gives cheer to landlords

Wednesday 17 August 2016

Post Brexit house prices, which rose by 0.5 per cent compared to the previous month, have tempted some commentators to make optimistic long-term forecasts about the UK’s housing market.
The annual rate of house price growth in July was 5.2 per cent – compared with 5.1 per cent in the month before the EU referendum, according to the most recent house price data from the Nationwide.

While it is unwise to make concrete predictions in these uncertain times, landlords should take heart from positive growth figures which prove the BTL sector’s underlying strength.

Robert Gardner, Nationwide’s chief economist, argues against assigning ‘any trends in the coming months to the impact of the referendum.’

He says sales were likely to slacken in the summer after buyers rushed to avoid the Stamp Duty surcharge increase that was introduced in April.

Post Brexit uncertainty may be deterring would-be sellers from putting their houses on the market, he says, and points to the fact that estate agents have the lowest levels of properties on their books since 1986.

Rob Weaver, director of investments at property crowdfunding platform Property Partners, believes that BTL investors are still earning a ‘stable and positive return’ while other assets fluctuate in value.

His assessment is upbeat: ‘If the past is any indicator of the future, there’s still no concrete evidence to imply this broad, continuing upward trend in house prices will change any time soon.’

The ‘sheer’ lack of supply is supporting high price, says Jonathan Hopper of buying agent Garrington Property Finders, and suggests buyers have benefitted since the Brexit vote, with many sellers forced to lower ‘frankly unrealistic asking prices.’

Despite this, he argues that some sellers remain locked in a stalemate with prospective buyers over what exactly is a realistic price. 

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