It has been assumed that the housing market has been slowing since the European Union referendum over three year ago, but figures and analysis reports are confirming this as we approach yet another Brexit deadline.
I have said this before, and I will again, just imagine where the market would be without Brexit. Indeed it is a miracle that prices are continuing to increase in many areas, but growth is slowing.
The latest annual report from Carter Jonas says it is now at its most inconsistent for many years, and it would be hard not to agree with that. But the report also point out that regional differences exist with the highest rate of annual house price growth in Yorkshire and the Humber and prices falls in both London and the South East.
No surprises there, but it also shows that the rental market is proving more buoyant with an average increase of 1.2% across the UK.
The current research coming out of the property sector also shows that sales are affected too. London has been hardest hit, according to an analysis of Land Registry figures by Springbok Properties. But many areas in Wales, Northern Ireland, Scotland and the North of England are seeing more transactions than before the referendum.
The biggest drop in transactions was in England with a fall of 5.2%, while Northern Ireland saw the sharpest increase of 11.6%. Wales saw an 8.4% uplift in activity, while transactions in Scotland increased by 5.7%.
One argument in favour of a slowing housing market is that it will benefit first time buyers to new research from Hometrack gives an interesting perspective as it shows that they have been the driving force for housing sales in recent years. They were the largest group of purchasers in 2018 with 36% of all sales, and are expected to remain so in 2019.
The analysis looks at the key drivers of first time buyer purchases and suggests that growth is expected to be driven in regional markets where affordability remains attractive, supported by availability of higher LTV mortgages. It reveals that first time buyers are not trying to purchase lower value homes and appear to be taking a longer term view but number have grown for eight years in a row, up 85% since 2010, outpacing other buyer groups.
It also show that Help to Buy schemes have supported this growth and the analysis estimates that 14% of all first time buyer purchases used Help to Buy in 2018 and says that slower growth in first time buyer numbers is largely a result of affordability factors.
The growth in residential values since 2013 has not been uniform. In areas where prices have grown rapidly the income required to buy, and deposit levels, are relatively high. In areas where price growth has been more modest, affordability levels remain less of a constraint on demand.
With all of this going on it is positive that the latest lender index shows that property prices in the UK held steady in August, increasing by 0.3% to an average of 233,541, according to the data from the Halifax.
However, this needs to be taken in context, and Russell Galley, Halifax managing director, pointed out that generally prices have been flat in the last six months, with the average house price having barely changed since March.
It means that while ongoing economic uncertainty continues to weigh on consumer sentiment with evidence of both buyers and sellers exercising some caution, there is unlikely to be any major change until after Brexit.
Ray Clancy
Editor Property Wire
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