Our Summer 2019 Property Report
The Bank of England’s August Inflation Report reported a weak housing market, but one which is showing signs of stabilization. The uncertainty surrounding Brexit was still an issue and 20% of those expecting to move home within 2 years have delayed for this very reason. Overall the general thought was that would be a small decline in house prices over the next 12 months.
RICS reported (July) that there was again strong tenant demand, the highest seen since 2016. However, landlords instructions continue to decline, with demand increasing and available rental property declining, the outcome has been an increase in rental growth by 0.25% on the headline rate, the highest it’s been over the last 12 months. Hamptons International research also indicated that the lower availability of rental property has fuelled rental growth particularly with ¾ of the regions showing the cost increasing. The south saw the highest price increases for tenants.
RICS also reported that there were growth areas in the North East and West Midlands and that these areas together with the North West were optimistic for future sales growth over the next 12 months. Regionally house prices were expected to continue reducing in London, South East and East Anglia, but increase in Scotland, Northern Ireland and Wales. Higher price category properties (+£1m) saw the continue to decline in price, those properties of up to 500K have remained fairly stable.
In general a downward trend has been seen on house prices for most areas.
Nationwide recently reported in their house price index that potential first time buyer numbers have increased but are inhibited by the stagnation in the home-mover market, the full reasons for this are as yet unknown.
“The markets have already factored in a possible cut in Base Rate due to the ongoing Brexit uncertainty – hence the fall in SWAP rates. The market is also predicting little in the way of rate increases in the long term. I have never seen the longer-term SWAP rates so low, so it is not a surprise that lenders will now be competing in the 10 and even 15 year fixed rate markets to attract long term borrowers. Of course, this is great news for borrowers!” – Steve Olejnik, Managing Director
19th August 2019
