U.K. house prices edged higher in August as the property market continued to experience a lackluster recovery following a tax increase and the shock of the Brexit vote, according to Acadata and LSL Property Services Plc.
The average value of a home rose just 0.1 percent, the same pace as in July, to 292,921 pounds ($390,000), the groups said in a report published on Tuesday. It left prices 4.3 percent higher than a year earlier, the weakest annual increase for three years.
The housing market has slowed sharply since the spring, with the June decision to leave the European Union adding pressure to a market already feeling the effect of a stamp-duty surcharge on investment properties introduced two months earlier. The impact has been most pronounced in London, where prices declined for a fifth month in July, the latest month for which regional data are available.
“While we might have hoped to see the impact of the tax changes slowly receding, the market remains muted,” Acadata Chairman Peter Williams and housing analyst John Tindale said in the report. “We must wait to see how the market settles as we move out of the holiday season into the key autumn period, and as the effects of interventions and immediate loss of confidence as a consequence of the Brexit vote trickle through.”
The number of housing transactions rose 2.6 percent to 78,000 in August. That’s still down 6.8 percent from a year earlier. Overall average prices are now 1.4 percent below a record reached in February. Separate data from the Office for National Statistics showed house-price inflation slowed to an annual 8.3 percent in July, from 9.7 percent a month earlier.
Values fell 0.5 percent in London in July as declines in the city’s most expensive boroughs outweighed gains in more affordable outer areas, the groups said.