As developments in Westminster dominate the news, stories about the property market can be lost in the noise or often allude to one of the various paths the country takes as we approach a decision on leaving the European Union. The different stories can muddy the water and confuse buyers and sellers who really just want to know if they should buy or sell their property as planned.
The latest Housing Market Update may help you make your own decision.
After an end to 2018 that saw reports of the average price of a UK home fall by as much 3.2%, (or £9,719) from October to December, and predictions of zero growth in 2019, the market has shown signs of recovery in the new year and the reports are inconsistent. Halifax reported that in direct contrast to the earlier reports they have experienced the average cost of a home rising by 2.2% compared from November. These reports were directly contrasted with Nationwide’s reports that house prices only increased by 0.5% from November until the New Year. As wage growth finally begins to overtake inflation we may see the market perform slightly better in 2019 than previously reported.
This Update told us that rents across the country fell for the first time in ten years as the government backed Deposit Protection Scheme (the DPS) released figures showing that the average rent fell by £9 (1.17%) from £774 in 2017 to £765. London showed the biggest fall in total cash reduction with the average rent falling from £1,324 to £1,294 a month (a saving of £30 on average across the capital). Relative to the previous year’s level, the biggest beneficiary of the fall was in Yorkshire and the Humber where the average rent fell by 3.63%.
It’s easy to ignore property owners who are (for want of a better word) ‘staying put’ when providing market updates because the market doesn’t tend to consider them unless they are engaged in the purchase/sale process. There was some good news for property owners who see the news headlines and want to indemnify themselves against fluctuations in the market and possible increases in the base rate affecting their variable rate. Last week HSBC dropped rates on 31 different mortgages while the Coventry building society dropped the interest rate on its market leading 10-year fixed mortgage from 2.35% to 2.25% for any mortgage with a 50% loan to value.
Whilst locally there has seemed to be a slowdown in house buying activity, this may be more down to people choosing to hold fire for a short while to see what 29 March brings. Richard Collins is a Residential Property solicitor at Pinney Talfourd. He summarises, “The entire property market is still unpredictable but if I had to evaluate the ongoing market trend I would say that the market appears to looking stronger than the doom-mongers are predicting. The downbeat predictions for the global economy for 2019-2020 may just be a case of negative publicity and hopefully we are seeing the beginnings of the market levelling out before any period of ‘uncertainty’ caused by Brexit” (we nearly managed to avoid that ‘B-word’….)
If you are considering purchasing a property, whether as your own home or as an investment, it is wise to speak to a member of our Residential Property Team to consider how this Housing Market Update may affect you.
This article was written by Richard Collins, Solicitor at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of March 2019.