21 December, 2018
The 2019 forecast
A recent property study, conducted by Rightmove and published in the last few weeks, has suggested that, nationally, house prices will most likely remain flat in 2019, not increasing or decreasing overall. This is all due to a significantly slowing property market and the difference in house price growth in the south of the UK compared to the north, which is something we’ll come back to later.
This forecast is based on the belief that the housing market will continue to perform in the way it has been performing in 2018, but there is the possibility that political or economic change could cause a shift in house prices.
The key takeaway from the study by Rightmove is that, “While buyer affordability is stretched in some parts of the UK due to house price rises having outstripped wage rises, the underlying fundamentals supporting the housing market are currently sound. Positive employment data and affordable mortgage interest rates at high loan-to-value ratios are key to keeping property prices broadly in line with current levels.”
In simpler terms, while some housing markets across the UK have seen some issues with affordability due to people in that area receiving less of a rise in wages compared to how much house prices have increased, across the UK as a whole, the housing market is relatively stable without any forecasted changes on the horizon. The phrase ‘fundamentals’ refers to the day-to-day operation of the property market, such as the buyers and sellers using it, and also both affordable mortgage rates and higher employment rates that allow more people to interact with the market.
The Rightmove study found that, “Buyer sentiment has been helped by recent interest rate rises not being fully passed on, which may continue to be the case with any future base rate rises as long as healthy competition remains among lenders keen for new business.”
Competition between lenders is set to help keep interest rates lower since they’ll all be wanting to make sure they’re offering the best deal for new buyers. And, with the lack of rise in prices, this could mean that properties that may have been ever so slightly out of reach before could be more attainable in the new year.
Location, location, location
The reason the national average of house prices is remaining constant is because of the differences in house pricing growth across the country, so choosing the right location will be important if you’re looking to buy in 2019. The northern half of the UK has seen slight increases in prices, from a historic low, while the property markets in the south have been more visibly declining in price.
Depending on location, according to the study, housing prices in the north of the UK could be set to climb between 2% and 4% during 2019. However, following on from the falling prices in 2018 in London and the south, prices in the south – specifically, as we have noticed, in the South East of England and the London commuter belt regions – could reduce by around 2% on average next year.
At Michael Hardy, we have seen this decline first hand having witnessed, this year, the biggest drop in prices since November 2012. With this local drop in average house prices it could be the right time for you to consider buying! On that note, have you taken a look at our fantastic selection of affordable properties in the Wokingham and Crowthorne areas?
With average asking prices for houses across the UK now considered to be 0.2% cheaper than this time last year and properties taking longer than in previous years to sell, it’s important to have a good, experienced agent working on your behalf to help you get that buyer. The market is tough on sellers at the moment so you need to do what you can to make your property as appealing as possible to buyers, take a look at our blog on the subject to help you get some more ideas on how to sell your house successfully in 2019.
Effects on the housing market
As we mentioned before, key factors that could directly impact the housing market in a negative way are either political or economic. These events include the uncertainty surrounding the UK leaving the EU, creating a possible economic change, or a shift in leadership in the government.
According to Today’s Conveyancer estate agents across the country, “Agents in some locations are reporting that home movers are being negatively influenced by the ongoing political uncertainty, and a more certain outlook would obviously assist market sentiment. Whilst uncertainty traditionally deters some discretionary movers, particularly at the high end of the market, there are many would-be buyers and sellers who will be getting on with their lives and will be keeping the market moving.”
Many are understandably hesitant to buy or sell houses in the run up to Brexit and the political and economic uncertainty that’s coming with it but for those that fall into the latter category above, there is still life in the market.
Looking to the future
Despite the possibility of some changes next year, there’s no reason for your home moving plans to come to a standstill just because of what’s happening in March. The market is definitely still moving and even with the Brexit situation, if the differential between what you buy at and sell for is the same then you haven’t lost anything.
If you’re looking to buy in the south, this could actually be a good time to start looking since prices are still dropping and your dream house could be all the more affordable as a result.
If you’d like help understanding the property market for 2019 in the Wokingham and Crowthorne areas and want to know when you should buy or sell a property, we at Michael Hardy would be happy to lend a helping hand. The vast experience and knowledge that our experts have will stand you in good stead for the coming year – simply click here to start your property journey.