U K Housing 2019 Expectations

January 16, 2019

 

The housing lender Halifax is expecting UK housing prices to remain stable for 2019 with prices growing between 2% and a of 4% price inflation. Growth in the UK market for 2018 was at the lower end of the previous prediction of growth rates  of 0% to 3%. 

 

With last nights historic Brexit vote with For 202 Against: 432 in the House of Commons along with shortage of housing and a lack of new build construction should keep prices higher and negatively impacting demand.

 

Russell Galley, managing director of Halifax tells PropertyWire:

 

“The housing market in 2018 followed a similar trend to recent years. In line with our expectations, house price growth slowed whilst building activity, completed sales and mortgage approvals all remained relatively flat.”

 

‘This was driven by a combination of continued uncertainty regarding the future growth prospects of the UK economy, and the ongoing challenge faced by prospective buyers in building up the necessary deposits.’

 

“Looking ahead, aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes. Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be Property prices in the UK likely to be stable in 2019, but depends on Brexit deal - pushed significantly in either direction.”

 

Mr. Galley is predicting that despite the ongoing Brexit issues once an agreement is made with the transitioning from the E.U.  he is expecting annual housing growth across the UK to be between 2% and 4% by the year end of 2019.

 

Mr. Galley:

 

‘This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, the uncertainty around how Brexit plays out means there are risks to both sides of our

forecast.’

 

“Longer term, the most important issue for the housing market remains addressing the affordability challenge for younger generations through more dynamic house building.”

 

 

 

In its analysis for 2019 the Royal Institution of Chartered Surveyors (RICS) is predicting home sales will decrease to 1.5 million units or a drop of 5% when compared with 2018. Their predictions posted in The Week indicate that sales in London and the south-east will experience a slight drop in prices whilst Northern Ireland, the north-west, Scotland and Wales should see ‘solid momentum’ in their local markets.

 

In its 2019 review RICS says:

 

“House prices are now a greater multiple of earnings than at any point since records

began.” 

 

“Such high house prices are shutting more and more people from accessing the market and forcing others to save longer for a deposit.”

 

“Even for those who could in theory afford to buy, current prices may still be off-putting. Unfortunately, there is little reason to anticipate a material improvement in affordability next year either.”

 

RICS is also predicting that a warning by the Bank of England should Brexit negotiations not come to an agreement causing property prices ‘crashing’ by up to 30% as ‘implausible’.

 

The Guardian newspaper reports:

 

“One reason why house prices are unlikely to crash is the continued paucity of supply and few forced sellers”.

 

“Sellers are thin on the ground, limiting choice for buyers and the likelihood of a price

crash.”

 

Another report by Rightmove, the housing website, indicates that asking prices in London dropped £11,275 thus making the average price of a home in the capital at £602,996. The 1.8% decline represents between November and December 2018 was the smallest in five years. Rightmove is also reporting that the number of homes listed for sale declined by 19% compared to the previous year.

 

Home and Property tells The Week:

 

“It's not a sign of an improving outlook but rather a dramatic reduction of properties available to buy.”

 

“Wannabe buyers are therefore left with slim pickings to choose from and vendors are

holding back as their homes appear to get cheaper.”

 

For sellers in London and its central borough locations are showing the most hesitation with new sales listings down by 24% and outer London areas down by 16%. 

 

The Week states:

 

“This is likely due to the fact that a large contingent of affluent homeowners in the capital’s most expensive enclaves do not need to move house and are waiting for a recovery in prices before selling.”

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