Uncertainty deters sellers but lower house prices tempt buyers and as we know, fortune often favours the brave!
We’ve seen it all of late, UK political uncertainty, the continuing Brexit debacle and Sterling, it all takes it’s toll and alongside the time of the year the property market still sees prices drifting downwards, meaning it’s potentially a good time for buyers to bag a Winter 2020 bargain.
According to data by Rightmove, the average house price fell by 1.3%(- £3,904) in November and the number of new house listings on their website shrank significantly, dropping by 14.9% – the highest year on year plummet in any month since August 2009, after the global financial crisis.
Of course, prospective sellers are possibly discouraged from selling because of Brexit uncertainty and the general elections too – waiting to see if Britain’s next government reforms stamp duty which might reduce the cost of acquiring a new home. This insufficient supply alongside a growing demand, exacerbated by Brexit is one of the biggest problems of the UK property market currently.
The number of property transactions taking place remains resilient, down by just 2.9% compared to this time last year, with the most active sector being properties with four bedrooms or more. Backing this up, seasonally adjusted data from HMRC revealed that there was a rise in UK house sales in October -up by 4.3% from September and the highest level since July 2017, revealing that buyers are still keen on the UK housing market.
Bank of England figures revealed that there was a 1.8% month on month fall of mortgage approvals, but that figure was followed by a slight rise of 0.3% in September.
The market is looking very attractive to buyers; provided you can find what it is you are looking for, who are also looking to take advantage of low mortgage interest rates. While uncertainty remains apparent, sellers and buyers are responding to factors such as improved mortgage availability and the limited number of available properties.
Market predictions – 2020
If an agreement cannot be reached between the UK and EU, a no-deal Brexit will happen. What does this mean for house prices? KPMG has predicted that house prices would drop by around 6%, or in a worst-case scenario, they could drop by as much as 20%. Similarly, the office for budget responsibility predicts that house prices would fall by 10%.
The rate of growth of house prices has slowed from 4.3% in January 2018 to 1.5% in January 2019, and stood at 1% at the end of September. It is expected that property prices will continue to drop before recovering in 2021. Savills, a global real estate provider, expects house prices to rise by 3% in 2022.
Where to buy a house?
The dominant group in the current London property market are first-time buyers and by 2025, first time buyers are predicted to account for almost half of all transactions in the capital.
Popular locations for first time buyers
South London dominated the most popular locations for Help to Buy purchases, new research has found. Buyers seeking to get on the property ladder went for Lewisham, Deptford and Croydon. The most popular areas in London for first time buyers were Greenich and Woolwich.
If you are interested in a new-build home as a first time buyer, Tower hamlets has the largest number of new-build houses with 3,464 units under construction and 1,309 having a planning permission, data from CBRE revealed. Newham, Ealing, Barnet and Southwark are also good choices with many new-build homes in the pipeline. With £5.25 billion being invested in the area over the next five years, Croydon is an up-and-coming area with prices starting from £300,000.
Best time to buy a house – before or after Brexit?
The reality is that you can never really forecast house prices, and the current atmosphere of unpredictability certainly doesn’t help. However, it does also potentially create an opportunity.
If you are interested in buying a property, the outcome of Brexit won’t necessarily make a difference. The only thing that matters is finding a house that fulfills your needs and taking into consideration various scenarios such as sudden increases in mortgage rates and whether you can afford it or not.
In fact, now might be the best time to take advantage of the buyers market as you will be faced with less competition with most buyers adopting a wait and see approach.
Let us help you!
At Cornerstone, our house buying agents have thorough specialist knowledge of the property market and extensive property search experience. Our expertise can provide you an unrivalled service, ensuring we find exactly the property you wish to buy or invest.
You will be given your own dedicated consultant who will be your single point of contact, managing the entire process from start-to-finish on your behalf. They will liaise with estate agents, solicitors, surveyors, etc. and provide regular progress reports to ensure peace of mind whilst remaining objective.
Our property buying and investing services encompasses the following areas: Initial Briefing, Area Appraisal, Extensive Search, Comprehensive Reporting and Market Update, Negotiation & Conveyancing. Contact us to find out more!