House prices soar again: Big surge since EU exit vote smashes economists' expectations
A SURGE in house prices has defied gloomy warnings of a crash after the Brexit vote.
As much as £4,000 was added to values in December – the highest monthly rise since March as the UK housing market ended the year with a bang.
Prices jumped by 1.7 per cent between November and December, smashing economists’ expectations of a 0.3 per cent rise, according to Britain’s biggest mortgage lender.
It led one expert to describe the housing market as “bulletproof”. Remainers had predicted the June 23 vote to leave the European Union would cause prices to crash.
But values were up 6.5 per cent year-on-year in December and up 2.5 per cent over the past three months of the year.
We do not subscribe to the view that we will see price reductions in 2017
The average property value was £222,484 last month, the Halifax said. “Positive news on house prices simply will not go away,” said Russell Quirk, chief executive of eMoov.
“That is despite the efforts of some to make us accept that the market will weaken in the wake of EU referendum angst. The UK housing market is fundamentally robust – bulletproof even.
“We do not subscribe to the view that we will see price reductions in 2017. The clever money is on yet more positive news to underpin the overall economy this year.”
The good news on house prices came as the FTSE share index hit another high yesterday, closing at 7378.8.
Russ Mould, investment director at AJ Bell, said: “The FTSE 100 extended its winning streak as the clear trend of pound down, stocks up proved to be the investors’ friend once more.
Exporters, firms with overseas assets and dollar earners led the way as the market digested Theresa May’s comment that the UK could fully withdraw from the European market.”
Russell Quirk stressed just how wrong Brexit doom-mongers have been.
He said: “Record low interest rates, a demand led by an aspirational, home-owning culture and scant supply, will all ensure that property prices remain buoyant – regardless of those using falling prices as a scare tactic.”
The view was echoed by Alex Gosling, of online estate agents HouseSimple.com. He said: “Doom-mongers predicted the UK economy would collapse after we voted to leave the EU.
"They also predicted that house prices would fall off a cliff. Neither has happened.
“On the contrary, four months of price rises confirm the market has gone into 2017 in good health.
“There is still an issue around the lack of new properties but buyers haven’t been scared by Brexit.
“And there’s no reason to believe they will be spooked when Article 50 is triggered. The housing market has proved extremely resilient.”
Mario Berti, CEO of Octopus Property, added: “People who predicted the worst for the UK property market in the wake of the EU Referendum vote have so far been proved wrong.
“Tight supply, high levels of employment and very low borrowing costs are acting as a floor under prices. Sterling weakness will also continue to attract foreign buyers, bolstering prices.
Martin Ellis, Halifax’s housing economist, warned however that the surge in values could slow down this year.
He said: “Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand. “Annual price growth is expected to slow – to 1 to 4 per cent.”
Homeowners in Luton, Bedfordshire, notched up the biggest percentage rise in house prices through 2016. The average value was £256,636 – 19.4 per cent higher than 2015.