Irrespective of any uncertainty following the nation’s vote to leave the EU, it seems it didn’t shake property buyers as sales continued to go through in July. There might have been an instant ‘knee-jerk’ reaction to the decision but property sales remain steady.
In July, the first full month since the vote there were a total of 104,200 properties sold. However, this figure is not keeping up with the pace of the market compared to the same month in 2015 as this July saw 16,000 fewer properties sold compared to last July.
Richard Donnell, insight director at Hometrack said: “In many large regional cities, sales appear to have held up thanks to a combination of much better housing affordability, improving economic growth and record low mortgage rates helping to stimulate demand.”
Despite the positive signs for the property market, some commentators do not have the same optimism and have said there is ‘still time’ for the predictions made as part of Project Fear to come true.
One commentator, Henry Pryor, said that the transaction figures from HM Revenue and Customs reflected a "slight stutter" in the UK sector.
"The market has not yet suffered the predictions made as part of Project Fear, but there is still plenty of time for them to come true," he said.
"The housing market, like the wider economy, has much to deal with. We are clearly a long way from the promised end to boom and bust."
What about mortgages?
Before the referendum, the Treasury predicted that Brexit would mean a rise of between 0.7% and 1.1% in borrowing costs.
During the pro-EU Project Fear campaign, David Cameron claimed the average cost of a mortgage could increase by up to £1,000 a year.
However, Governor Mark Carney announced the decision to cut interest rates from 0.5% to 0.25% for the first time since the financial crisis in 2009.
A need to underpin the housing market, which is key to the UK economy, was one reason for the move by the Bank of England to cut interest rates to 0.25% earlier this month.
An interest rate cut will directly reduce the interest paid on mortgages that track the Bank of England base rate. After the Bank of England interest rate comes down, fixed rate mortgages could also be fixed at even lower rates.
