Pre-Brexit House Price Index shows giant gains
House Price Indexes have been studied ferociously since the outcome of the EU referendum was sealed in late June. Predictions regarding the stability of the housing market have been made thrown about over the last few weeks, but as of yet, we haven’t seen any actual stats to back this up.
While we can’t review any post-Brexit statistics, we can look at the Office for National Statistics (ONS) House Price Index for May. Their indexes are slightly behind those of housing associations and surveyors, but they offer a much more complete insight into the property market.
UK annual house price growth stable
House price growth in the UK has remained relatively stable in 2016. Annual increases have hovered just above the 8% mark for the last 3 months, up from 7.7% at the beginning of the year.
These figures highlight the strength of the UK housing market. Annual growth is at the highest it has been since 2014. Even despite the looming nature of the EU referendum, the average price continued to increase by a steady amount.
South East house price growth close to London figures
Annual figures for the UK, give us a great insight into what the country as a whole is doing. For us, though, it is more important to focus on the South East. House Prices south of the capital have increased at a rate similar to that of one of the world’s most powerful cities.
Price discrepancy is large between the two areas of the country, but the reliance on commuting for the thousands – if not millions – of employees that work in London, has led to an equaling in growth.
Annual house price growth by England regions. Source: www.ons.gov.uk
The annual house price growth in the South East is now up to 12.9% compared to the 13.6% boosted by the capital.
South East investment opportunity
As we mentioned previously, no one has released information regarding house prices post Brexit. But, we can look at the figures that are available to us at the moment.
House price growth is dictated by demand, something that is likely to remain high in the South East. Commuter towns are growing ever more popular with London workers looking to start a family away from the city.
The housing market is unlikely to be affected by Brexit, and with house price growth already at 12.9% within the South East, it will be a long time before that figurehead towards the negative.
Another factor that could play a large role in keeping house prices on the up, is the lack of decision regarding Brexit. Theresa May has already stated that any talks regarding the leave process won’t take place until 2017 – at the earliest. This is also coupled with the lack of agreement within parliament about how and when the leaving process should be approached.
All in all, we are unlikely to see any wheels in place for an EU exit until well into 2017. This uncertainty should help the property market remain stable. Now is the time to begin your property development.