Prices in England and Wales set to dip 0.3% by end of the year
House prices in England and Wales are set to dip marginally by 0.3% over the next three months from October to December 2019, according to the latest forecast.
Overall the housing market continues to show resilience and stability and the report from reallymoving suggests that annual growth will remain in positive territory through to the end of the year.
As buyers register for quotes for home move services on the site typically 12 weeks before their purchase completes, reallymoving says it is able to provide an accurate three month property price forecast based on the purchase price agreed.
Overall, it says that the housing market continues to defy expectations with price growth remaining stable in the short term. Average house prices are on course to increase by 1% in October before falling by 0.3% in November and 1.1% in December.
It points out that the impact of a UK departure from the European Union on 31 October, with or without a deal, will not be evident until sales agreed in October and November complete in January and February 2020.
Year on year, house prices have been consistently higher than the previous year since August 2019. Looking ahead, annual growth is on course to remain positive through to the end of 2019, with an increase of 4.2% forecast in October and November, the highest level seen since October 2017, followed by 3.4% in December.
Two thirds of the regions of the UK are expected to see average house prices rise during the three months to December 2019, with the strongest gains in Yorkshire and the Humber at 3.1%, the East Midlands up 3%, and the North East up 2.6%. This data suggests that in most parts of the UK, buyers and sellers are continuing to agree deals undeterred by the wider political context.
London is forecast to experience the heaviest price falls between now and Christmas, with values set to fall by 4% from £573,243 in September to £550,430 in December 2019. The South East will follow a similar trend with prices expected to fall by 2% over the next three months.
‘The fact that house prices are on course to remain broadly stable over the next three months, alongside positive annual growth, suggests that buyers and sellers have adjusted to a new normal and become resigned to doing deals against a backdrop of political instability,’ said Rob Houghton, chief executive officer of reallymoving.
‘While our Forecast looks beyond the current Brexit deadline of 31 October, the impact of a departure from the EU at the end of this month will not be evident in the data until January and February 2020, when the deals agreed in October and November complete,’ he explained.
‘If a deal with the EU is approved by 31 October, or indeed if Article 50 is revoked, we would be likely to see an injection of optimism in the housing market that could prompt prices to rise by up to 5% from the new year as uncertainty melts away. Transaction volumes are restrained currently and if those buyers who are currently holding back were motivated to return to the market this would quickly result in more sales being agreed and potentially higher prices,’ he pointed out.
‘If we have a No Deal Brexit, we could expect a fairly significant economic hit which would possibly tip us back into recession. A lack of consumer confidence is the biggest risk to the housing market and if buyers are nervous about committing, particularly if we see unemployment starting to rise, this would really hold the market back for at least two or three years,’ he added.