House sales and prices have stagnated in recent months, as Brexit and election worries have depressed the market.
But with a government with a fresh mandate and some kind of Brexit now in sight, will the market bounce back in 2020?
At Continuum, we are looking at the signs.
The market is stable, not falling
The newspapers have been full of reports of a housing market Armageddon in recent months, but we should all remember that the purpose of a newspaper headline is to sell the newspaper.
Digging a little deeper and looking at the facts, the picture is very different from the one they are painting.
A proportion of estate agents saw average house prices fall in November, but that is mostly because of the continued decline across London, the South East and East Anglia, where the market may have been over inflated in recent years. Other areas including Wales, Yorkshire & Humber, the North, Scotland and Northern Ireland all saw more estate agents report rising prices than falling prices.
Recent reports suggest that house prices will narrowly avoid falling this year, with both the Halifax and Nationwide indices showing slight gains overall. The Halifax house price index showing prices increased by 4%, to £238,963 in the year to December. Rival lender Nationwide’s house price report suggests the average home costs £215,282 and also showed prices rising, but at just 1.9% annually
But although this sounds healthy, rather than feverish growth, it does not indicate business as usual for house sales. The latest report from the Royal Institution of Chartered Surveyors (RICS) a key barometer of the housing market, shows demand from buyers falling and less people are putting their properties up for sale.
Fewer buyers and fewer homes for sale suggest that the market is stagnating, even if homes are holding their value.
The simple conclusion is that people are waiting to see what will happen with the economy in general and Brexit in particular before they make a move.
So, what happens now?
The latest RICS survey suggests that estate agents believe it is the Brexit saga and political turmoil that put the brakes on the property market, and that while uncertainty remains evident it may be that the tide is starting to turn.
The figures for December are always depressed – no-one wants to think about a move at Christmas – but between September to November house prices were 0.2% higher than in the previous three months.
Observers suggest that this is bottled up demand, and that it will grow as soon as clarity returns to the economy.
Low mortgage interest rates and a shortage of properties for sale are acting to support prices. The market could lift if the government introduces measures aimed at boosting the sector, which could still include plans to cut Stamp Duty.
There may still be some bumps in the road. The economy still looks set for a challenging 2020 even with a favourable Brexit deal, and if things don’t go to plan, the possibilities of house price falls could still materialise. But it looks as though if things do not go smoothly, the market as a whole will be happy to sit things out until they do.
What should you do?
There will still be uncertainties, so the market is likely to remain small, but for those who simply must move home because of a career change or a growing family if you can find a home that you want to buy, you may have some advantages.
The first is that buyers are thin on the ground, so you could be in a position to negotiate, especially if you can move quickly.
The second is that there are some very attractive mortgage deals to be had, as lenders need to keep their lending on target to meet their revenue needs.
The third is that you can call on the mortgage team at Continuum to help you find the mortgage you need. Our experts can find the most attractive products from lenders across the entire market, and can provide access to deals that are not advertised on the high street.
That means whatever 2020 holds for the housing market, a call to us at Continuum could be the best way to make the home you want affordable.
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.
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