Are house prices back on the up?

The effects of Brexit have not been restricted to the UK economy, and big business. It has affected our personal finances.

One of the most dramatic of these effects of these has been on house prices, which seem to have been falling, albeit patchily, across the UK.  But things may be changing. We take a closer look at the facts and figures, and how we at Continuum can help you.

A boost in April

UK house prices picked up in April following a fall in values the previous month, according to one of the country’s biggest mortgage lenders.

The Halifax, part of Lloyds Banking Group, monitors house prices across the country. They report that property values rose by 1.1% in April compared with March when prices fell 1.3%. This suggests that the annual rate of growth almost doubled, with prices up 5% compared to a year earlier.

This would mean that the average home is valued at £236,619.

Compared with 10 years ago, when house prices were torpedoed by the financial crisis, the typical UK property has risen in value by £81,956, the equivalent of a 4.3% average annual increase.

The current Brexit postponement might have been enough to let market pressures reassert themselves.

Not everyone agrees

But as usual with house prices, the position is not altogether clear.  The annual house price rise of 5% suggested by the Halifax is based on its own mortgage data.

This might not be representative of the market as a whole, and is out of step with many other surveys. The Nationwide Building Society, which works out its figures on a different basis, saw growth, but instead of a large leap in values concluded that April was the fifth month in a row in which annual house price growth was below 1%.

This is of course normal at this time of year, although some feel that it is the pause in the Brexit debate that has prompted some people to get back onto the market.

According to the figures from online property showcase Rightmove the position varies across the UK. Wales, the West, the Midlands and the North West of England are certainly not being affected by any Brexit slowdown. Average asking prices in these areas may really have reached new all-time highs.

By contrast, London and its surrounding commuter belt may have seen year-on-year falls in average house asking prices.

A complicated position

So, what is really happening in the market? It looks as though several factors may be in play.

Experts have been suggesting that it is actually a lack of supply and low mortgage rates supporting prices, rather than Brexit relief.

The actual numbers of properties for sale may be down. A continuing shortage of suitable properties is actually driving prices – supported by affordability provided by mortgage rates. There are some very low rates available, especially if you consult a mortgage expert rather than relying on offers advertised by the major players.

So, what should you do?

It looks as though holding on while waiting for house prices to crash might not be the best way forward.

But it may depend where you are thinking of buying. Areas which may be most affected by Brexit, such as central London may still be heading down, but others, where the Brexit fear factor and demand from European buyers are both less may be heading up.

This means that depending on where you want to buy, it could be time to make a move – and this is where there is certainly some good news.

The low volume of sales may mean that there could potentially be plenty of mortgage deals to be had.

We appreciate purchasing a property can be a daunting prospect, so our expert team at Continuum of fully qualified, Independent Mortgage specialists will be there to help you every step of the way – from the very beginning of your property journey through to completion.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources:

halifax.co.uk – House Price Index – 8th May 2019

nationwide.co.uk – House Price Index – April 2019

rightmove.co.uk – House Price Index – May 2019