House prices still rising - but is there Brexit trouble ahead?

House prices still rising - but is there Brexit trouble ahead?

Data just released from the Land Registry shows that the average price of a property in the UK is now £218,964 after a rise of some 8.4 per cent over the past year.

In August alone - the latest data used by the Registry - the average property price rose 1.3 per cent 

The Registry says housing market indicators until the end of summer suggested relative stability with demand and supply in August broadly unchanged from the month before - although economic indicators were "somewhat weaker than in 2015 and early 2016."

Across the UK regions the largest growth - 13.3 per cent in one year - was recorded in the East of England, with 12.2 per cent in the south east and 12.1 per cent in Greater London. 

However, some consultancies are beginning to warn of Brexit-inspired trouble for the housing market leading to low or negative price growth in 2017.

PwC says some areas of central London are experiencing weaker growth following the EU referendum vote. House prices in Camden, Kensington and Chelsea and Hammersmith and Fulham have all grown less than two per cent over the past year compared to 12.1 per cent for London as a whole.

"We project that average UK house price growth for 2016 will be over five per cent but will cool to around one per cent in 2017 in response to slower expected economic growth next year," says PwC economist Thomas Fisher.

Meanwhile the EY Item Club - the only non-governmental business consultancy to use the Treasury's economic model to forecast economic changes - says house prices across the UK will dip 0.2 per cent next year as a result of Brexit uncertainty.

"Sterling's shaky performance this month provides a timely reminder that challenges lie ahead. As inflation returns over the winter it will squeeze household incomes and spending. The pressure on consumers and the cautious approach to spending by businesses mean that the UK is facing a period of relatively low growth," warns Item Club chief economic advisor Peter Spencer.

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