Six charts showing what the Brexit vote has done to UK house prices
When the result of the EU referendum came in, the housebuilding sector was one of the FTSE's hardest-hit groups, as investors panicked about what would become of the UK's housing market.
A year on, and analysis by PwC suggests things haven't been quite as bad as expected: house prices will grow at an average rate of around 3.7 per cent this year, compared to the one per cent it originally expected.
But that's not to say the Brexit vote hasn't had an effect on the UK's property market. These six charts show what's changed.
1. Transaction volumes, rather than house prices, have been hit hardest
The number of homes bought and sold "appear[s] to have suffered more" than house price growth, PwC says, as nervous would-be sellers use uncertainty as an excuse to stay put.
Transactions have fallen from 155,000 in the first two months of last year to just 132,000 this year – and awkwardly-timed reforms to stamp duty, which slapped three per cent extra on second homes from last April, have compounded the problem, says PwC.
2. … but house price growth has halved
Although house price growth hasn't been hit as hard as expected, it is nevertheless likely to fall by almost half, according to the analysis – from seven per cent last year to just 3.7 per cent this year. The only way to avoid that scenario is a rapid acceleration of prices over the spring of this year – which early indicators suggested had failed to materialise.
3. London's been hit hardest
Although all regions have been hit, the capital is likely to feel the most pain: house price growth, which was at 14 per cent in 2016, is likely to fall to three per cent this year, inching up to just under four per cent between 2018 and 2020. Still, PwC reckons a lack of supply will keep house price growth above average earnings growth.
4. Check out what's happened to central London
Traditionally, house price growth in the capital's central boroughs has been highest – but the combination of that change to stamp duty and Brexit uncertainty has pushed the strongest growth outwards.
"There has been a structural shift in London’s housing market recently, as house price growth has moved outward from the capital," the research suggests.
"Growing unaffordability within London, coupled with policy reform, has seen house prices in prime central London boroughs slow while prices in the outer boroughs and the commuter belt have risen."
5. In fact, the commuter belt is thriving
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The further out of central London you go, the higher the house price growth is, the evidence suggests: in the past two years, house prices in commuter belt towns have exceeded central London's average increase by four percentage points.
Among those are Braintree, Colchester, Brentwood and Basildon, where prices are expected to grow around 10 per cent this year, compared with London's four per cent.
6. The average UK house price will still top £300,000 by 2025
Despite uncertainty, growth in UK house prices is likely to remain pretty resilient thanks to dampened supply, the analysis concludes, with average prices rising from £212,000 last year to £302,000 by 2025. Even if housebuilding increased to 250,000 a year from the 190,000 built at the moment, it would knock just £5,000 off house price growth, putting average prices at £297,000 by 2025.