Housing market cools in first post-Brexit official figures, but prices are still soaring

House price growth cooled in the month after the EU referendum, according to the first official Government figures since the historic vote.

The annual rate of growth fell from 9.7pc in June to a "robust" level of 8.3pc in July, according to the Office for National Statistics.

Despite the slowdown, the 8.3pc growth rate is the third-highest measured so far this year. On a monthly basis, property prices edged up 0.4pc between June and July.

The increase in values continues to be fuelled by high levels of demand and a shortage of supply, according to the Royal Institution of Chartered Surveyors.

House prices in London soared by 12.3pc in July, only to be outpaced by the east of England, where they rose 13.2pc year-on-year. The average price of a property in the UK is now £216,750.

Samuel Tombs, chief economist at Pantheon Macroeconomics, said that July’s figures, which are based on actual transactions, only show that homebuyers already committed to property purchases didn't try to negotiate prices down in response to the referendum result.

He cautioned against reading too much into the numbers, which he said "don’t reflect the full impact of the referendum vote because it takes several months to complete a house purchase".

Mr Tombs added: "The fall in the average value of mortgages approvals over recent months and the 1.3pc fall in the Halifax measure of prices - which is based on the lenders’ mortgage offers - between June and August suggest that transaction prices will begin to fall soon."

Jonathan Hopper, Managing Director of Garrington Property Finders, described the results as “another dose of robust data", and said that "the post-Brexit bounce is starting to look less like a blip and more like business as usual for house prices”.

He added: "It is too soon, however, to dismiss the Brexit effect. The property market’s fundamentals are far from normal – with both demand and supply falling, the result is a benign limbo that is driving up prices even as the number of sales falls.”

Thomas Fisher, an economist at PwC, echoed these views, saying that "as many of these transactions will have been in motion since before the referendum, more data will be needed to make a proper assessment of how the referendum result is affecting the housing market".

The autumn selling season, which is traditionally strong, will offer a better picture as to the state of the housing market post Brexit.

"Our own expectation is that the UK housing market will cool not crash," said Mr Fisher. "In our main scenario, average UK house price growth is projected to decelerate to around 5pc in 2016 and around 1pc in 2017."

The index also reported that values of newbuild properties grew 15.6pc in the year to July, although the ONS stressed that this was based on a small sample and that the data can be volatile. The average first-time buyer in London paid £423,422 for their home.

Meanwhile, estate agency Winkworth reported that its pre-tax profits were up 8pc in the six months to June 30, while sales grew 6.7pc to £2.75m.

Winkworth, which is largely based in outer London but also has a presence in major towns and cities in south east and south west England, managed to increase its profits despite fewer transactions. This comes in contrast to Foxtons, a London-based estate agency, whose profits nearly halved in the first half of the year.

"Foxtons are in central London moving out, while we are quite embedded in those markets in the outskirts," said Dominic Agace, chief executive of Winkworth. "In part they [Foxtons] are trying to launch new offices in those markets – new and not established – and relying on central London offices, which are struggling with [lower transactions to do with increases to] stamp duty."

http://www.telegraph.co.uk/property/house-prices/housing-market-cools-in-first-post-brexit-official-figures-but-p/