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Insight & Opinion

Brexit’s impact on UK house prices is overestimated

Author: Gemma

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UK house prices may have not been impacted as much as Brits had expected, a new report has found.

According to Good Move, three-quarters of Brits anticipated that Brexit would have a negative impact on the property market however, property prices in every major UK city have increased since the June 2016 referendum.

What is the average house price in the UK?

The average UK house price is £234,370 according to the latest House Price Index from Land Registry (September 2019). Housing values climbed by 1.3% when compared to the previous year.

Zoopla’s index is slightly more optimistic, placing the average UK house price at £316,131 in November 2019, marking a 3.13% year-on-year increase.

How much do homes increase in value per year?

The rate in which housing values increase varies significantly across the country. Analysis of the UK’s main cities by Hometrack revealed that growth was slower in September however, regional markets have outperformed the UK average of 2.2% year-on-year.

Market conditions in regional cities remain strong, with further gains expected in UK property hotspots including Cardiff, Liverpool, Manchester and Edinburgh (to name a few).

Popular buy to let postcodes

Capital gains are an attractive upshot of investing in UK property however, a rise in demand for rental properties has meant that buyers can secure reliable (and rising) rental yields.

A useful buy to let postcode tool from Totally Money maps some of the UK’s top performing areas for rental returns.

Postcodes in Liverpool dominate the index’s top 10, with properties in the city’s central L1 postcode providing buy to let investors with the best rental return.

The rest of the index’s top 25 is made up of regional postcodes, with areas in Northern Powerhouse cities and the Welsh capital Cardiff ranking high.

Property investors will find the lack of the appearance of a London postcode a noteworthy point, with two London postcodes ranked in the index’s worst locations for rental returns.

2020 UK house price forecast

Despite a lack of optimism towards the market, a UK house price fall is not expected any time soon. In fact, data released by the Centre for Economics and Business Research suggests that they may be a sharp rise in the value of UK property in 2020.

For property investors sitting on the fence in the run-up to Brexit, now might be the time to revisit entering the market before UK house prices climb at a faster rate.

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