What will happen to house prices in 2019
2019 is the year in which Brexit is supposedly going to be finalised and many Brits are fearing for a No Deal Brexit which is sure to negatively affect many aspects of British life, including the housing market. In other words, there is much uncertainty amongst ‘remainers’ and ‘leavers’ alike to do with the state of the housing marketing going into, and during, 2019 and beyond.
According to analysts, wages and mortgage rates are going to play a huge role in the housing market in 2019, despite Brexit dominating the headlines. In 2018, the house prices remained relatively stable around the UK even with the anxiety presented by Brexit.
However, just because the average UK house price seemed to remain pretty stable, the prices do vary from better to worse across the nation. Some locations, such as the North of England and the Midlands saw strong property inflation, who London and South East reported stagnant or falling markets. Analysts predict that 2019 is going to look much the same as this. Bridging Loans Hub investigates.
The Rising Interest Rates and Mortgage Affordability
The average British property’s value increased by £2,860 in 2018, according to the reputable property website Zoopla, a rise of just 1.02 per cent.
In Scotland, the value of the property actually saw a decent rise of 6.3 per cent. Meanwhile in Wales, there was also a rise but it was a smaller percentage of 3.98 per cent. In England, there was a measly marginal of 0.58 per cent.
In 2019, the property market is expected to follow a similar trend. Although it could be all change depending on the outcome of Brexit on March the 29thand the impact this had had and will continue to have on the British public’s ability to afford to buy a new house.
It has been forecast by Halifax that there will be a 2 to 4 per cent increase in house prices for 2019. They stated:
“Aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes.
Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be pushed significantly in either direction.”
Interest rates were increased to 0.75 per cent by the Bank of England at the beginning of August 2018. Since, mortgage rates stayed low as building societies and banks have battled for customers.
Savills have predicted that house prices in Britain will rise by 14.8 per cent from 2019 to 2013, however, they stressed that there will be significant regional variations. The London forecast is only to see a 4.5 per cent increase, they say.
What is happening to house prices around the country?
There is a strong sense of regional variation when it comes to the UK property market. London and the South East previously strong performance has been since replaced by weakness, meanwhile, the Midlands, parts of the North and Scotland see improvement.
London saw an average drop of 1.67 per cent where a property on average now costs £653,587.
The East of England saw a fall of 0.5 per cent to £357,952, meanwhile the South East and South West both saw 0.38 per cent rises to £409,923 and £307,693 respectively.
In Scotland, the property market is booming. In fact, house prices there have risen for 27 consecutive months at this point, forecasting a 17 per cent increase in Scotland by 2022. It was Edinburgh that came out as the best city for the housing market, but other Scottish cities also did extremely well in 2018 and are predicted to do so into 2019 and beyond. It appears that there remains more confidence in the Scottish market over the likes of London.