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Brexit effect on UK house prices is changing

Lianna Brinded
Head of Yahoo Finance UK
Estate agent “For Sale” and “To Let” signs adorn a fence next to houses on March 14, 2019 in Coventry, England. Photo: Christopher Furlong/Getty Images

The latest data from mortgage lender Nationwide has added to growing signs that any impact of Brexit uncertainty on UK house price growth is starting to ease.

Growth in British house prices picked up slightly in April, with a year-on-year rise of 0.9%, up from an annual rise of 0.7% in March. The average price for a property in the UK now stands at £214,920 ($280,656).

Month-to-month figures show prices were up 0.4% between March and April, marking the biggest increase since November.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first-time buyers entering the housing market in recent quarters,” said Robert Gardner, chief economist at Nationwide.

READ MORE: Brexit delay may prompt another rise in UK house prices

“Indeed, the number of mortgages being taken out by first-time buyers has continued to approach pre-financial crisis levels in recent months,” Gardener added.

“First-time buyer numbers have been supported by the strength of labour market conditions, with employment rising at a healthy rate, and earnings growth slowly gathering momentum.”

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Source: UK Finance/Nationwide

Although house prices growing by just under 1% doesn’t seem too much to laud over, the consistent rise over the last few months has shown that some pockets of buyers are shaking off Brexit uncertainty.

“Given the previous years of outstanding house price growth, we could be forgiven for thinking that anything below the 1% mark where the annual rate is concerned, is entering life support territory,” said Marc von Grundherr, director of estate agent Benham and Reeves.

READ MORE: London property market suffers worst rate of decline in a decade

“This simply isn’t the case and while the rate of price growth has paused for breath, it remains within easy reach of wider targets for the year as we enter just the second quarter, von Grundher added. 

“Without the sufficient market fuel of buyer demand and replenished stock levels the market may struggle to make it out of second gear, however, it’s likely that we will see conditions accelerate through the spring and summer seasons with some more positive growth levels registered despite the continued uncertainty of Brexit.”