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Press comment: Subdued house prices mirror uncertain times

17 July 2019

If you are covering the UK House Price Index for May, please see the following comment from Gemma Harle, managing director of Quilter Financial Planning’s mortgage network:

The UK’s House Price index for May released today tells much the same story as recent months; people are simply keeping their hands in their pockets to see how Brexit turns out with UK house prices only growing by a sluggish 1.2% in the year to May 2019.

The strength of the remortgaging market is a good illustration of this. According to UK Finance remortgaging rates are at their highest for a decade and figures show that remortgages jumped 20% in May compared to the previous year. This is likely down to people deciding to stay put and lock into new deals while interest rates are still at historical lows. This is a trend that we can expect to see a continuation of until we get certainty over Britain’s relationship with the EU and we know who the next prime minister is and understand their approach to housing.

Drilling down into the numbers further, you can see that the London bubble continues to deflate after years of growth. Despite this drop, first time buyers in the capital still face an uphill struggle to get a set of keys to their first home. Such vast differences in the cost of a home for this group will start to take its toll on London’s skilled workers moving forward.

One good way for the government to stoke the property market  and address the problem of ‘generation rent’ is to enact policies which incentivise downsizing. Such a policy might free up existing housing further down the chain and give first-time buyers a better chance of getting their first foot on the housing ladder.

Alex Berry

Alex Berry

External Communications Executive

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