News is certainly going to play a big part in the UK housing marketing for 2019 with many headlines likely to effect the confidence and ultimately prices across the country.
2018 still saw growth in UK housing prices though this tailed off towards the end of the year with reports such as asking prices in the capital fell £11,275 in November hitting many national media channels.
I feel that the affordability ceiling as already been reached in many areas of the UK and in certain cases it has surpassed what people can realistically or should be paying out for living costs – Many purchasers have stretched themselves to get on to the ladder and rentals show no real sign of slowing down with landlords squeezing every penny from their investments that obviously hits tenants.
Many news feeds agree that the market will likely stall as confidence in investments put in to property will fall though the current lack of supply over demand will give the market a safety net over a house price crash situation.
Certain areas of the UK, and I pick out Manchester here, which seems to be buzzing in new construction, with my last recent visit showing a wash of cranes and new buildings rising on the horizon as you approach the city, may avoid any immediate decline in prices though as we know, the ripple effect usually always comes in to play. London has certainly seen a slow down and my recent report towards the East Anglia region and especially Colchester where I live showing a steady increase in the amount of listings now reduced as both estate agents and sellers realise that the market has changed slightly and the boom time and charge what you want era is / has faded away.
Brexit – Of course the dreaded word for many, the 6 letters which have in many ways divided the country and taken up so much space in daily press / media outlets, has also weakened confidence in that we still are none the wiser to be honest which way it will swing from a leaving Europe fully as per the democratic vote result in 2016 to a weaker and Brexit in name only decision. Both outcomes and anything in between will effect the house prices of 2019 – If it is a decision not to leave then it will likely stable things in the property market whereas a second vote or a leave decision will have an effect as much immigration in to the country could be effected such as people leaving / less likely to be attracted to enter thus reducing demand on property.
Everything surrounding Brexit must also be seen as having an effect for 2019 with regards to property prices be it less confidence in the government, rise of newer parties and those which are centre and centre / right, the yellow vest movement also continues to spread across the globe to include the UK thus more disruptions, unrest and failing confidence – investors will be looking on with concern.
For sure sales volumes are likely to reduce slightly and property to be on the market for longer thus increase chances of asking prices falls.
I foresee that as our lives become more expensive to live out ie so many household bills surround us these days from WIFI to Netflix subscriptions and of course the increase in housing costs be in size of our mortgages to rental charges, preference will be on housing with little to no maintenance costs over older style high maintenance options. Taxes may also rise and landlords could especially be hit with further paid for regulations to adhere to and taxation when selling rental property.
Less property on the market will initiate a stand off by buyers and sellers and it will depend on which one will give in first, many of those renting wishing to buy will certainly not want to jump in at the top of the market especially if there are signs of falling prices and of course sellers will not want to enter a falling market unless they have to, ie interest rate hikes of heavier taxation on 2nd / 3rd homes etc. According to Rightmove, the number of homes being listed for sale has plummeted by 19% which shows that currently the market might be held together purely on the basis of supply and demand which of course is a very valid reason for house prices to remain at least neutral if not in a small percentage of annual growth.
There is no crystal ball to know what will happen though I see more negative elements over positive so a slight decline in prices over the year of 2019. We must also remember that there is also a degree of unrest in other countries across the globe with many headlines negative or the uprising of people wishing to get their voice / opinions heard with right minded leaders popularity rising in many key European cities. Consumers may still feel that on average property prices will do just fine here on home soil, though a recent report on the property portal Zoopla shows that estate agents are less optimistic, with just 33% predicting property price increases, down from 42% two years ago.
Author: Christopher Walkey
Founder of Estate Agent Networking and an internationally invited speaker on how to build online target audiences using Twitter and LinkedIn.