Inflation Variable for Individual Cities

However, on an individual city level, inflation has been variable. Some cities, particularly those in the south of England, saw growth starting to slow. On the other hand, cities in the north of the UK, including Glasgow, Manchester and Leeds, experienced much stronger growth over the last quarter. Hometrack puts this down to more affordable prices, lower interest rates, improving local economies and higher yields making purchases attractive to investors.
Sales Momentum

Analysis conducted by Hometrack over the three months to mid-July revealed that recent sales momentum in regional cities, and higher house price growth, appears to have held up over the referendum period. In contrast, the headwinds facing the London market ahead of the vote have resulted in rising supply and relatively fewer sales pointing to slower house price growth in the months ahead.

Looking at new listings and sales for selected cities, Hometrack found that new listings have grown faster in the last three months than the average increase in supply seen over the last 12 months. For all cities in England and Wales, excluding London, new listings have grown 10% faster than the 12 month average, this rises to over 15% in London.

In contrast, the relative change in sales over the last three months has registered a relative fall of 8% in London i.e. 8% fewer homes sold in the last three months compared to the 12 month average. The relative change in Bristol is 0%, while in larger regional cities, where house price growth has been picking up momentum, the relative change is sales is positive at up to 7% in Manchester.

Impact of Brexit

“The reality is that it is still very early days to assess the true impact of the Brexit vote on the housing market,” commented Richard Donnell, Insight Director at Hometrack. “Our view remains that sales volumes are likely to slow and price growth will moderate over the second half of the year.”

“The severity of a slowdown will depend upon the response of consumers and businesses to the uncertainty created by the decision to leave the EU and the impact this has on the economy,” he added. “The early market activity data confirms our view that London will bear the brunt of any slowdown.”

RICS has also noted that it is still too early to definitively say what impact Brexit has had on the housing market. It highlights that both the tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market, but found that conditions vary markedly between agents. A large portion of respondents to its survey have said that, after an initial wobble, activity has returned to normal, while others feel Brexit has only had a very modest or negligible impact.

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