Apprehension over Brexit, compounded by the upcoming election have brought the UK housing market to a near standstill, according to recent data, which could make now an ideal time for some buyers to grab a bargain or move house.
The UK property market can expect a jump in activity and return to more positive price movement if the UK leaves the EU with a deal at the end of January 2020, predict most financial analysts. This would break the stagnation that has plagued the market in the period leading to Brexit, made worse by the recent threat of a no-deal scenario, which appears to be receding.
Before the Brexit extension was agreed, Standard & Poor’s (S&P), one of the world’s three biggest providers of government and company credit scores, forecast the housing market will avoid slipping into the red and record a 1.5 per cent price rise in 2020, so long as the UK leaves Europe with a deal.
“Indicators of UK economic activity have been fairly volatile in recent quarters, but the underlying pace of growth appears to have slowed as a result of weaker global growth and an intensifying of Brexit uncertainty,” said Robert Gardner, Nationwide’s Chief Economist. “Annual house price growth remained below one per cent for the 11th month in a row in October, at 0.4 per cent. Average prices rose by around £800 over the last 12 months, a significant slowing compared with recent years – for example, in the same period to October 2016, prices increased by £9,100.”
A lack of supply, caused by perspective vendors too nervous to sell, is a key cause of the current market inactivity, although conversely it’s also helping to stop prices falling. Supply of new instructions nationwide was down 17 per cent year-on-year in September, reported UK portal and market analysts Home.co.uk.
“The supply of new sales instructions has reduced in all regions, with the biggest drop in London of 33 per cent year-on-year, as vendors fail to commit fearing Brexit fallout,” said Home.co.uk, adding that a drop in stock levels is “emboldening vendors when setting the asking price”.
All things considered, the current climate shouldn’t necessarily be a reason to delay moving house, according to one estate agent. “Vast numbers of people who have a desire or need to move are reluctant to make big buying decisions while we are beset by the uncertainty that Brexit has brought,” explained James Greenwood of Stacks Property Search. “The problem with the seemingly endless wait for political issues to resolve themselves is that life can rarely be put on hold. Three years is a long time in life – children arrive and start growing up, jobs change, relationships move on, lifestyles adapt to new ages. For some, moving is non-essential, but for those whose lives aren’t static, waiting is a painful process.”
Here are six reasons why you shouldn’t wait any longer:
Few properties but even fewer buyers
On the face of it, the market looks thin with a seemingly limited choice of property available, but if you look hard and are determined you’ll find the right property, and you should be able to negotiate a good deal, especially as some vendors are determined to make a sale before Brexit happens, so you can put the boot in on price. The advantage is that you shouldn’t have too much competition.
Prices have remained relatively stable, so it’s an excellent time to both buy and sell. An unpredictable market with big price moves in either direction makes moving tricky, this is an excellent opportunity to transact without having to contend with difficult fluctuations.
Interest rates are at an all-time low, so there’s really only one way for them to change, and that’s up! While we don’t expect any dramatic rises in the short term, it’s sensible not to overstretch yourself, and to fix at a good rate if you can. Great fixed deals are available, and as long as you build in plenty of contingency, it’s a good time to obtain finance. Current levels of Stamp Duty are, in our opinion, here to stay, so don’t hold your breath waiting for any improvements.
If not now, when?
There will always be something to prevent you buying and selling, we have had over ten years of political and economic uncertainty, but if you wait for a perfect blue sky, you could wait for ever, there’s always something around the corner. But not making a move that is required has a big impact on personal and family life and can cause tensions and unhappiness. It’s better to take the bull by the horns, make the move, and enjoy getting on with your new life in your new home.
The costs of moving continue to rise, and that’s a trend that’s unlikely to change. The sooner you do it, the lower the costs are likely to be.
By not moving, you are potentially restricting your life choices whether they’re about jobs, schools, partners, or lifestyle. Don’t put your life on hold.
Concludes Mr Greenwood: “Whether we wind up with a hard Brexit, a soft one, or none at all, we are unlikely to see any dramatic effect on the property market. In either of the first two scenarios activity is likely to increase, but big fluctuations in price are unlikely, so there really is no sensible reason to wait.”