Research conducted by the Office for National Statistics (ONS) has shown that areas of the UK that voted strongly for Brexit have seen the strongest rises in house prices. Conversely, the areas which voted more strongly for Remain found the property market a bit more sluggish.
The Brexit Effect
The UK’s top five Leave regions were the West Midlands, which voted 59.2% to leave the EU, the East Midlands (58.8%), the North East (58%), Yorkshire & Humber (57.7%) and the East of England (56.4%). All these regions have, since last June, seen property prices rise by at least 3%, with Boston and Peterborough (East of England) seeing rises of 4.25%.
The three Remain regions, Scotland, London and Northern Ireland all saw slower growth or even falls in house prices. In Scotland (62.1% Remain), prices fell by 1.2% and London’s rate of rise slowed to 2.45%. London voted 60% in favour of Remain. Northern Ireland (55.8%) saw price rises of just 1.8%.
No-one knows what’s causing this
The pattern is quite clear, but no-one knows what’s behind it. It’s possible that people in Leave-heavy areas feel so very optimistic about life outside the EU that they’re prepared to bump up their offers to secure a new place. Remain-heavy areas aren’t feeling quite so buoyant, however, and may have delayed house purchases or let a property go if they were unsure about job and financial security.
Overall, however, the Referendum vote didn’t lead to a huge property crash, as people will still want to move (especially if they’re leaving the UK). Demand is still high, with low interest rates and a still-functioning UK economy during the second half of 2016.
We still have Article 50 to come, though, followed by who-knows-what, and this could cause more uncertainty. Recent news reports of food price rises and impending job losses in car factories could dampen enthusiasm somewhat. However, the property market is very driven by supply and demand and if they remain roughly in balance then the market stays stable.
If nothing else, it’ll be interesting to see how the post-Brexit property market looks in the next few years.
