Brexit impact on house prices is uncertain, Nationwide says
By Kevin Peachey
Personal finance reporter (BBC)
The Brexit effect on the housing market may take months to become clear, the Nationwide said as it reported a slight rise in UK house prices in July.
The UK’s biggest building society said that uncertainty after the UK’s vote to leave the EU could reduce demand among buyers.
Even so, the resulting impact on house prices was “not certain”.
Property prices rose by 0.5% in July compared with June, and were up 5.2% on a year earlier.
That meant the average UK home was valued at £205,715, the Nationwide said.
The data from the Nationwide is its first since the EU referendum. Generally, investors have expected the UK housing market to be hit by any slow down or uncertainty following the UK’s vote to leave.
However, the data is based on mortgage offers made by Nationwide, suggesting that it is too early to record sentiment among buyers.
“Any impact from the vote may not be fully evident in July’s figures, as there is a short lag between a buyer making the decision to purchase a property and applying for a mortgage,” said Robert Gardner, Nationwide’s chief economist.
“In the near term, increased economic uncertainty may lead to weaker demand for homes. Leading indicators are consistent with softening ahead. Household confidence fell sharply in the wake of the referendum result, especially attitudes towards making major purchases, which in the past has correlated with mortgage activity, though less closely in recent years.
“How the labour market evolves will be crucial in determining the demand for homes in the quarters ahead.”