What Does 2019 Hold for the UK Property Market?
Nick Leeming, Chairman of Jackson-Stops, shares his insights on what we can expect to see from the UK property market this year.
2018 was a year of political and economic uncertainty, which took its toll on some areas of the property market. With the House of Commons vote on Theresa May’s deal still to take place, the impact of Brexit negotiations on the economy is still unclear. Currently, we expect to see average UK house prices remain relatively flat in 2019, with a 1% increase expected in UK property values on the year.
We predict that higher value properties will continue to be challenging throughout in 2019, unless they have been priced competitively, while the middle to volume end of the market should remain more stable over the course of the year. However, we do expect to see overall UK transaction numbers to remain low, at around one million over the full year.
Stability of London house prices reliant on the outcome of Brexit negotiations
In London at present, a significant amount of buyers and sellers are holding off on making decisions before firm agreements have been made on the UK leaving the EU. Our London Group does expect to see transactions increase this year however, unless the Brexit deal is particularly bad, as it is often economic and political stability that guides both sale and purchase decisions for clients, particularly in the central London market.
Continued interest in super prime London rentals set to increase
With the number of rental property listings said to have depleted since the summer due to a direct impact of the financial restraints on the buy-to-let market, it is expected that rental prices will increase as a result. Our London Group’s lettings division predicts prices will continue to slowly strengthen over the year, particularly when it comes to rental contract renewals, where prices may have fallen behind the current market price. The popularity of super prime rental properties in prime central London is also expected to increase, boosted by price sensitivity in the sales market.
£1million new builds to become a rarity in London
Assuming the UK receives a positive outcome from Brexit negotiations, our London Residential Development division envisage that current underlying high levels of demand in London will translate into greater levels of commitment this year. As a result, competition from buyers is expected to increase and less developments will be available with discounts or incentives.
This year the division also expects that £1 million plus new build homes will become a rarity in London. Over the last 12 to 18 months, the majority of housebuilders have been focusing their attention on planning and building developments with homes suitable for first-time buyers, downsizers, and families looking to purchase properties in the sub £1 million price bracket. Demand will therefore be high for £1 million plus pads but is unlikely to result in any notable price increases.
Something housebuilders in Westminster may also be contending with this year is the Council’s recent plans to limit the size of new homes to 150m². In theory, our London Residential Development division thinks this is sensible, however 150m² is arguably too small given the typical purchaser demographic in the area. Given its zone 1 location, properties in Westminster are always going to be priced at the premium end of the market and a proportion of wealthy home buyers in this area will simply need more space. We believe the door should at the very least be left open for homeowners to combine plots if the demands of their lifestyle requires it.
Activity and confidence to return to the country homes market in March
While the country homes market may not be as heightened as it was a few years ago, beautiful homes in bucolic countryside which are accurately priced will always achieve strong interest and we can expect the English love affair with a quintessential country home to endure this year.
The market is well-educated and both buyers and sellers with a desire to move continue to feel confident in their decision. Prices plateaued somewhat over the last few months of 2018, and so we can anticipate a slightly quieter period over March. However, come the end of Spring, we expect confidence and activity to return with the warmer weather and any well-priced country homes with easy access to good transport links and sought-after amenities will continue to sell.
New build coastal homes popular with second home owners
The demographic of our new homes buyers in the West Country has remained reasonably consistent over the last few years but this does vary depending on the stock available. Many of our clients are currently looking for low maintenance, middle to high end village homes in close proximity to good transport links and a range of amenities. This year, we expect any properties that meet this criteria will be popular with families, while new build coastal homes will continue to be sought-after by second home owners.
Kindly shared by Jackson-Stops