The house market has always been notoriously difficult to predict, but with recent political uncertainty the task has an added layer of complication. Even so the leading experts still have expectations as to where the market will move to, and its not all doom and gloom.
Last year had its fair share of upheavals, from the stagnation of the house prices in the capital to the perhaps irresponsible news from Mark Carney, Bank of England governor, suggesting that house prices could fall by 35 per cent in the event of a no deal Brexit. He later clarified that this was a worst-case apocalyptic scenario that banks should plan for, rather than an imminent crash, but it highlighted the current concerns about the market.
Despite the negative headlines surrounding London and Brexit there was some good news. The majority of areas outside of the capital have continued to experience modest gains especially in the midlands and north west. The market even surprised the experts in November by growing more than they had predicted. The Brexit affect is likely to cause an impact in the demand on new property in the coming year, especially as household budgets are squeezed but many voices in the industry are predicting that rising house prices will not be abated.
According to experts here is what the year ahead looks like:
JLL forecasts a strong future for the UK housing market, with a new phase of lending and affordability, along with renewed confidence in the market if a Brexit deal materialises.
On the proviso that a deal with the EU is reached, the corporate property powerhouse predicts that prices will grow by 11.4 percent by 2024. However, housing is still set to remain modest for the 2019 and 2020 periods.
2019 UK-wide growth: 0.5 percent
2019 London growth: 1.5 percent
Their prediction is a neutral 2019, with a dip in the London market offset by growth in other parts of the UK. Primarily, they expect the north of England to see a rise 2 to 4 percent over the next year.
Miles Shipside, Rightmove Director and housing market analyst, says: “While buyer affordability is stretched in some parts of the UK due to house price rises having outstripped wage rises, the underlying fundamentals supporting the housing market are currently sound. Positive employment data and affordable mortgage interest rates at high loan-to-value ratios are key to keeping property prices broadly in line with current levels.
2019 UK-wide growth: 0 percent
2019 London growth: -1 percent
Whilst Brexit will clearly have an impact on the housing market, at least in London, Savills have argued that affordability will be the major player in the coming years’ market growth. Similarly, they are expecting a strong rise in UK wide housing over the next 4 years, with a 14.8% increase from 2019-2023.
The affordability equation will see regional variance in this however with London only predicted to see a 4.5% increase, and even a dip in the next 2 year. The North West by comparison is expected to see a rise of 21.6 percent.
2019 UK-wide growth : 1.5 percent
2019 London growth: -2 percent
Real estate mega-group CBRE predict that London will maintain a flat house price for the coming year, however there is light on the horizon. Over the next 4 years they predict that the capital will see a rise of 10.5%. The next few years are expected to be fairly slow however with an increase of 1.6% in 2020 and 3.5% in 2021.
2019 London growth: 0 percent (18 months)
The Royal Institution of Chartered Surveyors (RICS)
RICS believes that Brexit uncertainty will hit the UK market in late 2019, however the overall prediction is still an increase in UK house prices.
At the moment, normal residential properties are selling at their slowest speed since 2016, and until March RICS predict that the selling price of most homes, and the amount of homes being sold, will begin to edge down.
RICS Chief Economist, Simon Rubinsohn, said: “It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market,”
“Indeed, I can’t recall a previous survey when a single issue has been highlighted by quite so many contributors.”
2019 UK-wide growth: 1 percent
This London-based firm of consultants and surveyors forecasts that the London property market will experience further turbulence before the market settles in 12 to 18 months.
The head of residential James Hyman said that the London market “still faces significant challenges in terms of affordability, buy-to-let investors and outdated infrastructure”. This comes after recent Cluttons recently released data showing an average drop of 5.7% in the prime and core central London housing prices over the last year. They also found that no areas registered a house price increase.
2019 London growth: -10 percent (18 months)