Recent real estate economics of the UK have begun to foreshadow the uncertain future the country holds as it edges closer to Brexit; according to The Guardian‘s recent article.
The average house prices across the UK have fallen by 0.1% between July and August to £210,495, with cities such as Bristol struggling to meet the new Demand for houses. Reflecting the recent real estate economics, the latest monthly price drop knocked the annual growth rate back down to 2.1% “a level last seen in May, which was the lowest rate in four years, from 2.9% in July”. The yearly figures can be seen below, taken from Nationwide’s recent report.
In reflection of the wider economy, the real estate economics highlighted by The Guardian and Nationwide have exemplified economic growth rates to have halved from last year to about 0.3% per quarter in the first half of this year. Businesses within the industry have brought to light that not only the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries.
Robert Gardner, Nationwide’s chief economist stated that “in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows”. Samual Tombs, chief UK economist at Pantheon Macroeconomics, elaborated on this further, stating that the conditions are caused by ” the squeeze on real wages (adjusted for inflation) and the slowdown in the pace that mortgage rates are falling.” However as the economy struggles to stabilise with inflation rates predicted to rise, the strength of the pound to stagnant and the tightening of real wages, housing prices can be expected to grow very slowly.
To read The Guardian’s full article, please click here.