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Brexit effect ‘limited’ on UK house prices

28 November 2018

Average house prices have risen in most large British cities since the referendum

What does the chart show?

Since the Brexit vote, average house prices have fallen in just one UK city out of 20 monitored by the Hometrack Cities House Price Index. Published on Wednesday, the index suggests there has been “no immediate deterioration” in the outlook for prices or market activity following the vote to leave the EU.

Only one city, Aberdeen, has seen average prices fall in the two years or so since the referendum. Even London, where there has been a sharp slowdown in activity and falling prices in many boroughs, is nearly 2 per cent higher overall in average price terms than in June 2016.

Which cities are doing well?

Property markets in six cities have shown marked confidence in brushing off any concerns over the effects of Brexit, with annual average house price growth of 6 per cent or more in the latest October figures. They are Leicester (with 7.7 per cent), Edinburgh (7.4 per cent), Manchester (6.3 per cent), Birmingham (6.2 per cent), Nottingham (6.1 per cent) and Liverpool (6 per cent).

Measured from the two years or so since the referendum, the top-performing cities are Birmingham, Edinburgh and Manchester, where prices have risen by about 15 per cent.

Richard Donnell, insight director at Hometrack, said: “Two and a half years on from the Brexit vote, our analysis reveals a limited direct impact from Brexit uncertainty on the housing market thus far. Large regional cities continue to register above-average house price inflation, with the discount between asking and sales prices narrowing on rising sales volumes.”

How big are these discounts? As of October, they were narrowing in four of the biggest cities — London, Birmingham, Manchester and Liverpool — suggesting robust demand for homes. In Manchester, buyers are getting an average of 2 per cent off the asking price and the discount has hit a five-year low in Liverpool. The London discount is higher at 4.8 per cent, though it has narrowed in the past six months. Only Aberdeen was higher, at 6.5 per cent.

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