2019 saw a lot of turbulence in the UK property market. Whilst the capital saw stagnating growth for property, the North continued to see encouraging signs of growth, even with the uncertainty of Brexit at the forefront of the country’s attention.
It is fair to say that investing in property in the current climate is challenging, full of ups and downs, a relatively stressful environment in which to invest.
Listings in the property market were down 8% in 2019 compared to the previous 12 months. According to FJP Investment, sellers are becoming averse to selling, with many homeowners opting to upscale their existing homes with renovations.
In fact, the Government recently introduced legislation that has made it possible for homeowners to add an existing floor onto their property without the need for planning permission, a huge incentive for those in need of additional space but are not willing to buy in the current market.
Mixed growth across the UK
The fact we are not seeing much activity in the market is quite clearly a result of the uncertainty surrounding the political situation in the country. Interest rates have remained low, something that should encourage those looking to buy with a mortgage.
It has helped to some extent. First time buyers were relatively healthy over the past 12 months. Combine this with the ever-continuing elements of life such as debt, schools and new jobs meaning that people were still moving and buying houses. We saw a 1.4% rise over the year for house prices across the UK, this being dragged down by the UK capital.
Other areas in the UK saw some surprisingly high growth, great for homeowners in the area. Specifically, Billingham in County Durham topped the list, a substantial 12.3% rise in house price growth over 12 months. Interestingly, nine of the top ten areas for house price growth were in the North West of England, with average growth of 6% or more.
Manchester and Liverpool, two cities that have seen substantial development paired with increased opportunities for work have received the most interest from tenants, being the most searched cities on Rightmove. This makes for good reading for homebuyers and Landlords in these areas.
What can we expect in 2020?
Having received some clarity with regards to the general election, we can begin to see a clear avenue for the Brexit process in the short term. This may well result in increased activity in the property market.
A release of pent-up demand is expected to increase activity, most evidently in Q2 of 2020. Those that have been waiting to see the political situation become stabilised will now feel confidence in the relative stability we should see in the market.
However, many experts believe this revival may not last the course of the year. With the UK’s relationship with the EU being stretched, uncertainty and debate over the relationship is likely to begin the next wave of uncertainty over UK assets. Although in the first half of the year we are likely to see a rise, we are equally likely to see a fall in the second half of the year.
The market must be considered on a local level
It is very easy to get intimidated by the fall we are seeing across the UK, but as a homebuyer, doing your own research will shield you from much of this uncertainty.
Areas that are seeing high levels in development, such as major cities in the North, are likely to continue to see rises in house prices, irrespective of uncertainty in the long term. Schools, transport links and other local factors can even see fluctuating rises and falls in house prices from street to street.
The areas likely to see the biggest rise are the cities that are still relatively affordable but also seeing high levels of development, areas that spring to mind here are Belfast, Glasgow and Liverpool.
Affordability is key
Fair obviously, affordability of housing is the biggest factor when it comes to the demand of property. The Governments policies on aiding first time buyers should continue to be a priority for helping build sales for property.
Particularly, those that are struggling to save for a deposit and are not interested in the new build homes currently encouraged by the Government with the Help to Buy assistance scheme need support. New builds are currently above average for price, something needs to be done by the Government to make housing truly affordable for first time buyers.
However, it does not appear that housing is a priority for the Conservative Government. It is likely that Brexit will continue to overshadow the housing market, with a focus on securing suitable trade deals after leaving the EU. With the UK currently falling short of demand for suitable housing, this only getting worse in the years to come, perhaps a shift in focus is required.
It therefore appears that 2020, although we are expected to leave the EU, will continue to tread water through the year. Buyers and sellers may play it safe until the dust has truly settled over the economy and subsequently the housing market.