UK house prices plummeting
November 2018 has seen the largest drop in house prices since 2012, with the prices falling by £5,000 on average. An interesting statistic shows that it is the south of England which is suffering the most from house prices falling.
There is no doubt that the looming of Brexit drawing ever closer plays a larger, if not the largest factor, in this property market crash.
According to statistics, the average price of a property coming on to the market no has been down by 1.7% or £5,222 on the month alone. Rightmove found that the biggest falls were found in London. In London, the typical asking price fell by £10,793 which is in accordance to the 1.7% and in the south-east of England in general, the asking prices have fallen by £8,647 (2.1%). Both of these are very significant amounts of money.
Hotspot towns falling
It is really interesting that the ripple effect, where the rising prices in London wok to spread around the rest of the country during the boom years, has now seen a reverse in that falling prices in the capital are now spreading across the south.
What were higher-end towns are now actually among the biggest annual fallers. These include Rickmansworth down 7.1%, Esher down 6.4% and Gerrards Cross down 6%. This is, interestingly, following a price rise of nearly 40% from the seven years preceding 2018.
Research which was conducted by property website Zoopla found that 38% of properties which are currently on the market have in fact been marked down in price, but according to their statistics Brighton is the highest at nearly 47%. They stated that seller in Brighton were on average having to reduce the asking prices of their properties by £28,000 in order to achieve a sale.
A decrease in house viewings
With the property market in the state it is in now, it is not just the prices which are falling, it is also the interest.
Reports which are anecdotal in nature state that sellers listing their property but receiving hardly any viewings at all. Furthermore, they report that it is taking far longer for the buyer to actually put in an offer. Rightmove’s study found that the average property takes 61 days to sell, which us up from 56 days in a study conducted earlier this year. Meanwhile, the properties which are on the books of the average estate agent is said to be 52, compared to around 42 to 47 earlier in 2018.
These figures reflect data which was collected by surveyors earlier this month, which outlined that the property market is the at its weakest point since 2016. The Royal Institution of Chartered Surveyors found that prices were flat or falling across half of the country, with sales in “limbo” until a Brexit deal comes to the fore.
What can be done to slow or stop the property crash?
The biggest debate which is on-going with estate agents is how to cut asking pricing without actively precipitating in the property market crash.
The key to this appears to be to drop the price by enough that it brings in a new set of buyers who are currently in a different bracket. You do not want to make the mistake of putting buyers off by the seller reducing the price on consecutive occasions, this can have a seriously damaging effect.
The role of Brexit in the property crash
Even with a proposed deal for the UK exiting the European Union now circulating, the uncertainty of Brexit is having negative effects on the housing market in the UK.
Furthermore, with mass concerns of a hard Brexit on the horizon, the property market is looking like it may be rather stationary until it is certain what Brexit will mean for the market and the economy.
Nevertheless, there is debate as to whether this property crash thanks to Brexit could actually help first-time buyers. With house prices continuously rising way over the household incomes on average until the recent crash, it was then making it impossible for many first-time buyers to be able to purchase a home at all. This property crash could be positive for them, but not so much current homeowners who will lose out on the value of their property quite significantly.