U.K. Property Market Proves Resilient in Face of Brexit Vote

(Bloomberg) -- The appeal of bricks and mortar remained relatively robust in the face of the initial shock of Britain’s vote to leave the European Union.

Asking prices for U.K. homes declined 0.9 percent to 305,504 pounds ($406,000) this month, a drop only slightly greater than the average over the past six years, according to property website operator Rightmove. Buyer demand declined from last year, when it was boosted by the general election result, but was at the same level as 2014 amid supply constraints and low mortgage rates.

“While confidence has been unsettled, the governmental instability in the few days after the referendum now seems to be being addressed far more quickly than was originally imagined,” said Rightmove Director Miles Shipside. “This is not a new credit crunch and the effect on banks and mortgage lending should be limited. As long as lenders keep mortgage deals attractive and available, the underlying demand for home ownership should overcome most uncertainties.”

Rightmove said home values typically fall about 0.4 percent in July as sellers price “more conservatively” going into the summer vacation season. Areas of the country where the housing market was struggling earlier in the year, such as parts of London, will continue to see price reductions, it said.

Homebuilding could get a boost if the government scales back fiscal austerity to aid the economy, as Britain’s new Prime Minister Theresa May has indicated, which would also help lessen price pressures, Rightmove said.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Andrew Atkinson