What is really happening in the housing market?

Are property prices going up, down or staying where they are?

At Continuum our Independent Mortgage Advisers help people find mortgages across the UK – which gives us some valuable insights into what is really happening in the market. We believe that overall, prices may be on the up – but the real picture may be complicated.

The Office for Statistics (ONS) figures show UK property prices continuing to rise but at a slower rate than a year ago. The average UK house price was £229,000 in April, £3,000 higher than the same month a year earlier.

The complication comes because the rises are not evenly distributed. New data from online property site Rightmove has shown four northern regions seeing record price highs. The East Midlands, the North West, Wales and Yorkshire and the Humber also outperform the national average in terms of the numbers of properties coming to market and the levels of sales agreed in 2019.

A north-south divide

In the south, however, things are very different. Fewer sellers coming to market in the south means less property choice for buyers, fewer sales and prices that are static or even falling – as in London.

Here Rightmove highlights the problems in the London market. The capital continues to suffer the impact of Brexit more than any other region with the price of newly marketed property in London falling by an average of 0.4 per cent, or £2,709, this month. It may be due to stretched buyer affordability and worry about the direction of house price moves (currently -2% annually) as well as Brexit worries.

The average house price is close to record levels, while the southern regions are actually down. The northern regions are pushing prices up, rather than already high-valued properties in London.

But understanding the housing market seems to be becoming even more complicated.  It’s not just different regions that seem to be responding differently.

Flats may be going out of fashion

Figures from the Land Registry show that the price of detached homes has been rising, with semi-detached and terraced homes going up, while the cost of a typical apartment or maisonette in England has fallen by 2.1% in a year.  This may be due to two factors. The fall in demand from investors, many of whom have pulled out of the market, has affected the demand for flats. The slowdown in the market in London and the South East of England may be partly due to the resulting lower demand for flats.  The heavy concentration of apartments in the capital has been reflected by an overall fall in the market.

What does this mean for you?

If you are currently contemplating a move, these changes in the market may mean you need some expert advice to make the right decisions – especially if your move is a first purchase.

There are two ways Continuum can help.

The first is to sit down with you and look at the long-term financial position. What can you really afford now, and what can you realistically expect to fit in with your financial circumstances as they change in the future. If prices are falling in your region, you might need to look at the impact this could have on your plans.

The second way is to ensure you get the very best deal on your mortgage. There are dozens of lenders and hundreds of mortgages on the market, including some that are only offered to mortgage brokers. Getting the one that is right for you is vital – we can explain why you need to look not just at the interest rate, but at things like fees which can boost the real cost and make a huge difference to what you pay for your home – whichever direction the market takes.

If you are thinking about a move, simply call us at Continuum, and our experts will work with you to find the answers – and the mortgage – you need.

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.

Reference:

https://www.bbc.co.uk/news/business-48689404

https://www.yourmoney.com/mortgages/june-marks-six-consecutive-months-of-house-price-increases/

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/april2019