Brexit Delay May Result In Yet Another Rise In UK Property Prices

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According to data from a benchmark index by Rightmove, a property website, house prices in the United Kingdom rose by the highest amount in more than a year in the four weeks to the 6th of April.

Data revealed a monthly rise of 1.1 percent in asking prices — adding £3,447 onto the average cost of purchasing a home. This was considered as a significant improvement for homeowners as compared to the typical seasonal increase of 0.1 percent.

The increase in house prices is indicative of buyers becoming more confident in the property market in at least the medium term. The data of Rightmove is based on property ads on its website. It states that this accounts for 90 percent of residential property on sale in the United Kingdom.

Over the past three years, the property prices have been choppy because of the great uncertainty over the timing and effect of Brexit.

While the Brexit referendum was in 2016 and Article 50, the two-year mechanism notifying that the United Kingdom would leave the European Union, was triggered on the 29th of March 2017, the United Kingdom has still not officially sealed a deal or a date for its departure from the bloc.

Originally, the United Kingdom was meant to leave the bloc on the 29th of March this year. Theresa May, the UK prime minister, reached a deal with the European Union but after three attempts to pass it through UK parliament, politicians turned down the divorce agreement. This has led to back and forths with the European Union for an extension to Article 50, in an attempt to avoid a default no-deal Brexit. Currently, the extension is until the 31st of October this year.

However, the most recent figures reveal tentative signs of confidence from buyers in the same month as the extension was announced. The more buyers there are in a strained supply market, the higher asking prices are likely to be.

If this trend will continue, it could result in a major uptick in property prices, given that there is still a massive shortage of housing in the United Kingdom.