According to the latest figures from Halifax, house prices from March to May have been 1.4% higher than the previous quarter. Part of this increase is due to the current low interest rates and rising real earnings, strengthening housing demand overall. But, with the injection of a hefty dose of reality the property market is now the reverse of what it was at its peak.
Where once average prices were dragged up by runaway inflation among prime property, now the mid-market’s steady growth flies in the face of the price-cutting seen on Britain’s most expensive properties.
A dip in demand from would-be buy-to-let landlords following the stamp duty hike had been expected, but the 45% slump in sales recorded in April shows just how acute the morning after effect was.
Increasing numbers of vendors are now being forced to reassess their overly ambitious asking prices – shifting the power dynamic from a seller’s to a buyer’s market.
While the property market has been co-opted into the Brexit debate, for now the impact of the referendum uncertainty has hit the prime sector hardest – while at most other levels of the market, demand still far outstrips supply.
With no prospect of an interest rate rise any time soon, price inflation is likely to remain steady over the coming months.
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