Ross Clark Ross Clark

Will house prices rise after Brexit?

A headline in the Times this week appeared to speak of a boom in house prices since the general election: “Housing Market Enjoys Boris Boost as Prices Rise at Record Rate”. Given Britain’s history of house price booms and busts that sounded dramatic indeed, so what did it really mean? The ‘record’ which turned out to have been broken turned out to be the change in asking prices – as measured by property website Rightmove – between December and January. This month, the average asking price for a property in Britain is £306,810, £6785 or 2.3 percent higher than it was in December. The previous highest uplift that Rightmove has measured was between December 2014 and January 2015.

That is not as exciting as many estate agents would want you to believe. Asking prices, needless to say, are just that: it is the price that someone is asking for their property, not the price they will eventually go on to receive, if indeed they manage to sell it at all. Anyone can ask what they like for their home; persuading someone to pay that amount of money is quite another. Moreover, there is almost always a sharp uplift in average prices in January because it is a month in which many new properties come onto the market. By December, the housing market tends to be dominated by properties which haven’t sold earlier in the year, often in spite of price reductions along the way. Come January and these are joined by a large number of properties which have just been placed on the market, many of them at ambitious prices.

But all this aside, can we expect a revival in house prices? For the past few years the housing market has been steadier than at any point for decades.

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