We might be concerned about the effects on industry and the economy, but one of the most pressing questions most of us ask about Brexit is; “What does it mean for house prices?”
About the only thing that industry experts seem to agree on is that political uncertainty has weakened the property market. So, with the official departure date from the European Union getting closer every day, and no end to Brexit negotiations in sight, exactly what does 2019 have in store for house prices?
While no one really knows what the future holds, opinions are mixed – but there are some who think that the real picture might not be nearly as dark as some choose to paint it.
According to the latest report from the Royal Institution of Chartered Surveyors (RICS) house prices will drop and fewer homes will be sold over the next three years while confidence in the economy returns. Their UK Residential Market Survey is authoritative. It is used by the government, the Bank of England and other key institutions as a guide to the housing market. It shows stagnation, with the average home now taking an average of four months to sell – although the picture is different across the regions.
The RICs survey is accepted as the leading source of market intelligence for the industry. But it is based on figures from the past month. Looking at the past cannot really help us see the future, and not everyone agrees with its predictions.
.Property website Rightmove believes the underlying fundamentals of the market – plenty of people in employment, low interest rates and more potential buyers than homes – will prevent a fall in prices.
They agree that Brexit will put the handbrake on actual growth but believe that overall asking prices will be flat in 2019.
However, there may be some corrections where the past few years have seen overheating. In the South, asking prices are expected to dip. Values in London and the commuter regions that serve the capital, which have seen up to 40% growth in the past five years could fall by around 2%. This will be offset by growth in prices in the North, where homeowners have seen only marginal price increases since the financial crisis. Rises of up to 4% are predicted.
But although some observers seem to think the market is in the doldrums, not everyone agrees.
It is just possible that once Brexit has become a done deal, the main restraint on the market will be removed.
One of Britain’s biggest mortgage lenders, the Halifax, certainly seems to think so. After a year of growth that struggled to reach 1% overall, they are predicting house prices to rise by up to 4% in 2019, and that stability would return to the market. This may be the most extreme forecast, with other lenders such as the Nationwide looking at 2% overall growth – but it does show that not everyone in the property industry believes that things will really come to an uncomfortable standstill.
Are you on the move?
The year ahead may be a hard to predict, but it could be that once the dust does settle on our EU exit, the damage to the housing market may be much less dramatic than we currently fear.
If you have property plans for 2019, it might be best to start exploring them now. If you find the house you want, the biggest mistake of all might be to delay. If you are ready to start looking at a mortgage, or any of the other financial sides of homebuying, at Continuum we are keen to help.
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.
yourmoney.com – Rightmove: house prices set for zero growth in 2019 – 7th December 2018
yourmoney.com – Brexit takes a toll on UK housing market – 13th December 2018
telegraph.co.uk – House prices to recover in 2019 with 4pc rise – 8th January 2019
rics.org.uk – UK Residential Market Survey – 13th December 2018