The average house price in the South East also slipped 0.2% during the last month, but the biggest drop outside London was in the North East (-0.7%). This fall comes as a serious blow to a region that was just showing the first signs of genuine recovery since the financial crisis sent the market into a downward spiral.
However, several English regions and Wales still indicate price growth. The East Midlands rose the most (0.7%) over the last month, followed by the North West (0.4%), Wales (0.4%), Yorkshire (0.3%), the West Midlands (0.2%) and the East of England (0.1%). As the Brexit vote is only two weeks old, we may well see these figures turn negative next month.
Whilst the key drivers of lack of supply and cheap credit remain, uncertainty brought about by the Brexit vote is undermining the property market. Investors are justifiably concerned. Capital inflows into UK commercial property have already dropped by 50% over the last quarter, according to the Bank of England, and Barclays Plc has recently downgraded UK homebuilders.
Moreover, according to the financial news agency Bloomberg, the FTSE 350 Real Estate Investment Trust has fallen 19% since the vote, and the Bloomberg UK Homebuilder Index has slumped 35%. The confidence in the marketplace that took years to restore after the fall of Lehman Brothers has simply evaporated post-Brexit.
Overall, the current mix-adjusted average asking price for England and Wales is now 6.1% higher than it was in July 2015, and we predict this figure will tend towards 0% over the coming months.
