From political twists to house price turns, discover what the second quarter of 2017 meant for the UK’s property market
Following Brexit, Trump and Macron, the world of politics continues to spin on its axis, with the establishment of a new status quo continuing in 2017.
After Theresa May finally triggered Article 50 at the end of Q1, the relatively definitive notion of beginning negotiations with the EU appeared to be the only political tightrope on the horizon.
But the Prime Minister’s Brexit agenda meant she had one more trick up her sleeve.
Calling a snap election in order to further her Parliamentary majority, Mrs May found her confidence misplaced after seven weeks of campaigning left her Conservative party without a definitive majority and with fewer seats than they started with, resulting in a Hung Parliament.
Foiled by the unlikely ascendancy of Jeremy Corbyn and his Labour party, the PM was forced to turn to Northern Ireland’s Democratic Unionist Party (DUP) to forge the alliance needed to form a new government.
With the details of the DUP deal still being ironed out and Brexit talks now underway in Brussels, Theresa May’s minority government will need some early wins at home and abroad to prevent further uncertainty and economic slowdown – as well as avoiding another trip to the polls later in the year.
Cutting across the usual contradictions of the property industry’s varying house price indexes in Q2 was one clear message – house price growth in the UK is beginning to slow.
Official figures showed that the prices continued to rise in April, with property values averaging more than £200,000 across the UK. However, rival mortgage lenders Halifax and Nationwide both agreed that the growth gap is narrowing, with annual increases dipping slightly in April and May.
Heightened uncertainty, rising inflation and increasing affordability pressures in certain areas of the country are amongst the factors identified by the firms as being behind the deceleration of the market.
By contrast, forecasts compiled over the quarter by global estate agency Savills, show the UK’s purpose-built student accommodation sector will see another buoyant year - achieving an estimated £5.3bn in investment by the end of 2017.
The sector’s countercyclical characteristics and rising rents continue to capture the interest of overseas purchasers, who were found to have nearly doubled (64%) their investment share in the UK’s student market in 2016.
As the world watches with bated breath to see how the UK will navigate its way through Brexit, the decision to leave the European Union has failed to quell the appetites of both domestic and international buyers in Q2.
The UK’s historical reputation as a strong safe haven for property has emerged unscathed from the current political climate, with a new survey revealing that a third of respondents still intend to invest in the UK market, driven by the sector’s strong historical performance.
Assessing buyer intentions across five key international markets, a separate survey from IP Global found that the UK remains a target destination due to its strong market fundamentals and favourable exchange rates – attracting, in particular, investors from Singapore.
The enduring popularity of UK property amongst investors from around the world demonstrates that, despite all its current challenges, long-term prospects remain bright for the UK property market.