It’s fair to say that the property market has been very lacklustre over the past year.
It has been easy to predict what major house price indices will report: that house prices are fairly flat and London and the South East are not performing as well as other regions.
But will we see more of the same in 2019? Moneywise asked four property experts for their views.
The dreaded ‘B’ word
Brexit is very much on homeowners’ minds when it comes to whether to move now or wait.
Buying agent and market commentator Henry Pryor says: “Things will get worse before they get better. In the first quarter of 2019, the run-up to our actual ‘divorce’ at the end of March, there will continue to be people who have to sell.
“Death, debt and divorce will continue to drive the sale side, but how many people ‘must’ buy? The only ones who’ll be confident doing so will demand something for the risk they think they’re taking, which in most cases will be a discount on the price.
“I expect prices to slip by 10% to 15%, which is the discount that most buyers will demand. Savvy sellers can make up for this by negotiating similar discounts on what they go on to buy.
“Brexit is just one iceberg that we need to navigate a way past in 2019; politics, the economy and confidence in general will all have a significant part to play on prices.
James Greenwood, regional director of Stacks Property Search, adds: “Only an end to the indecision that we have been suffering since June 2016 can free up the market. And whatever the outcome, we will certainly see a significant increase in activity.”
But Jeremy Leaf, estate agent and former RICS residential chairman, says it’s too easy to blame Brexit for the current lack of activity.
“I believe Brexit may have been over-played as the main culprit for present market woes. Prices have risen so far and so fast in recent years – particularly in London and the South East – that an affordability ‘push back’ was inevitable,” he says.
“Overall, the market has been underpinned by low mortgage rates, strong employment, lack of stock and Help to Buy in what has become a fragile, needs-driven buyers’ market, which is unlikely to change into early 2019 – irrespective of Brexit.”
“Buyers will ask for a discount of 10% to 15%”
Small falls in the capital
When it comes to the regions, it seems like London house prices will continue to stagnate or even fall.
Lucian Cook, head of residential research at Savills estate agency, says: “We’re at the point in the housing market cycle when London underperforms the regions, after years of house price growth in the capital well ahead of anywhere else in the UK.
“Historically, when this happens, London house prices continue to rise, albeit at a slower pace. This time around, Brexit angst – a factor impacting sentiment in London and its commuter belt more than other regions – will likely trigger small falls in London in 2019, with the South East and East of England remaining flat.”
- UK house prices expected to flatline in 2019 as stretched affordability and Brexit uncertainty continue to dampen the market
Mr Pryor says: “London and the South East have seen the real house price growth over the past decade, so they stand to lose the most.
“As always, there will continue to be regional disparity: prices in some parishes will rise while others will fall further. As Phil and Kirsty remind us, it’s about location, location, location. Best in class will always sell and be sought after,” he adds.
Winners and losers
What type of property you have and whether it’s in the town or country will also impact on its sellability.
Mr Greenwood explains: “Rural properties with acres of land have been struggling in recent years, but we are beginning to see an increase in appetite for properties of this kind. I expect this sector of the market to pick up significantly in 2019,” he says.
“Buyers and owners are increasingly prepared to take on significant work to make houses more efficient, and 2019 will see more eco retro-fitting and future-proofing. Properties that are inefficient will become harder to sell as buyers pay more attention to running and maintenance costs.
“Cottages in tourist areas will be snapped up by investors jumping on the Airbnb bandwagon in anticipation of a rise in Brits holidaying at home due to the falling pound, airport delays and Brexit fallout,” he adds.