State of the UK housing market and house price rises

State of the UK housing market and house price rises

Sharon Sangha, Solicitor and Head of Conveyancing at Lawson-West said:

If you have been holding-off of putting your property on the market, now would be a good time to get going. With house price increases continuing in specific regions (North West, East Midlands, West Midlands all predicted to be 3.0% price rise by the end of 2019), the Leicestershire property market is set to rise and the volume of house sales is increasing."

“For first time buyers still on the look out to get their foot on the property ladder and with the Stamp Duty Land Tax relief still in force, there is no better time."

“Brexit may be coming and the fear of economic uncertainty that currently floats above the UK is strong, but the current housing market remains strong in several regions especially across the central heartland of England, East and West Midlands and also in the North West."

“The likelihood of a hard Brexit is looming for Q4 2019 and we believe homeowners are choosing to move house now, rather than wait any longer, avoiding the uncertainty that a hard-Brexit could bring to the housing market if they waited until the Autumn.”

Read our housing market research below:

  • East Midlands 2.9% house price increase
  • Brexit hasn’t prevented house sales
  • Done waiting for Brexit? - It’s time to sell your house

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Lawson-West researches the state of the UK housing market and finds some positive changes.

 

The UK housing market has two main elements which together are indicative of a healthy house move economy: (1) Volume of House Sales; and (2) House Price Increases.

Volume of house sales

When the volume of UK house sales increases, the UK housing market is buoyant, there are lots of people on the market all eagerly moving home. This is the sign of a confident economy, one where a steady stream of mortgages are applied for and accepted by lenders and where houses sell within a few months or even weeks and there is a shortfall in the demand for eligible homes in nice-to-live places.

The annual UK house price index release for April 2019 was announced recently by the Office for National Statistics (ONS) (1) and with it some interesting growth figures which show Brexit might not be having the effect everyone thinks it is. It is true to say:

  • In the past three years house price growth has slowed
  • The rate in which the prices increase has also diminished

And of course, Brexit is partially to blame with many people waiting to see the outcome and how it will affect the economy. However, with further Brexit extensions, a political leadership contest and further delays it is clear that the UK property market is done with waiting.

Office for National Statistics (ONS) (1):

  • Growth rate of the UK housing market has increased by 1.4% so far this year to April 2019
  • Demand from prospective buyers reaches an 8-month high with a 16% increase since September 2018.

It’s clear the UK property market is done with waiting

 

House price increases

When house prices rise, the UK housing market is healthy. According to the recently-announced House Price Index of April 2019, house price growth in the UK has generally slowed since mid-2016 (1) and now stands at 1.4% for the UK – a fall of 0.2% from March 2019.

Although house price growth has slowed and the growth rate of the house sales market is not as high as in previous months, property prices in many regions are still on the rise and they are not diminishing in value.

Property prices are still on the rise. In certain regions, they are not diminishing in value.

Office for National Statistics (ONS) (1):

The average UK house price in April 2019 was £229,000.00, £3,000 higher than the same period in 2018.

 

Regional differences

England is currently at the lower end with a house price growth increase of 1.1% and an average house price at £245,128 (£242,396 last April).

  • Although house sales are strong, it appears that house prices are decreasing in London and the South East generally.
  • The lowest annual growth was in London, where prices fell by 1.2% over the year to April 2019, up from a fall of 2.5% in March 2019.
  • Savills report (4) that London has had a (-2.3%) growth rate for the year to April 2019.

This leaves us to believe that property prices are being lowered in London at the moment in an attempt to create sales. This follows a 72% house price rise over the past ten years.

While London house prices fell over the year, the London area remains the most expensive place to purchase a property at an average of £472,000, followed by the South East and the East of England, at £319,000 and £289,000 respectively. The North East continued to have the lowest average house price at £131,000.

 

In which regions are house prices rising?

According to the Office for National Statistics (1):

  • Wales is thriving with house sales up 6.7% and an average house price at £164,000.
  • The East Midlands was the English region with the highest annual growth rate, with prices increasing by 2.9% in the year to April 2019. East Midlands house prices are set for further growth.

Wales is thriving - witnessing the highest annual house price regional growth within England so far at 6.7%

East Midlands was the English region with the highest annual growth rate, with prices increasing by 2.9% in the year to April 2019

North West prices increase by 2.6%.

  • According to Savills’s latest market update (4), West Midlands (4.4%) and Wales (5.4%) experienced the highest annual price rises and this compares to Nationwide’s figures (5) of West Midlands (2.6%) and Wales (4.3%). Both indicating a rise in prices in those regions.

Affordability vs. Brexit

According to Savills’ research (3) in November 2018 it was ‘market affordability’, not Brexit (2), which had been predicted to be the major factor for the UK Housing Market.

However, the most recent RICS survey (7) offers new optimism with “Buyer enquiries edging upwards over the month after significant declines in the early part of the year”, and Halifax (6) “Demand looking more stable”.

With this, and the increase in supply and demand for properties, June 2019 at Lawson-West saw the greatest number of new enquiries for conveyancing services for the year to date and this looks set to continue as a trend.

Lawson-West’s conveyancing team predicts a rise in successful property negotiations for both sellers and purchasers in the months of 2019 still to come, especially in the East Midlands.

Sharon Sangha, Solicitor and Head of Conveyancing at Lawson-West said:

If you have been holding-off of putting your property on the market, now would be a good time to get going. With house price increases continuing in specific regions (North West, East Midlands, West Midlands all predicted to be 3.0% price rise by the end of 2019), the Leicestershire property market is set to rise and the volume of house sales is increasing.

“For first time buyers still on the look out to get their foot on the property ladder and with the Stamp Duty Land Tax relief still in force, there is no better time.

“Brexit may be coming and the fear of economic uncertainty that currently floats above the UK is strong, but the current housing market remains strong in several regions especially across the central heartland of England, East and West Midlands and also in the North West.

“The likelihood of a hard Brexit is looming for Q4 2019 and we believe homeowners are choosing to move house now, rather than wait any longer, avoiding the uncertainty that a hard-Brexit could bring to the housing market if they waited until the Autumn.”

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References & Sources:

1)       Office for National Statistics ons.gov.uk, (2019, 19 Jun). House Price Index. April 2019 [online]. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/april2019 [Accessed 16/07/2019]. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/april2019 section 3

2)       National Association Estate Agents www.naea.co.uk, (2019, May). Housing Report May 2019 - Housing Market Bounces Back as Buyers and Sellers Feel Brexit Fatigue [online]. Available at: https://www.naea.co.uk/lobbying/housing-market-reports/ [Accessed 16/07/2019].

3)       Savills Research www.savills.co.uk, Oxford Economics, (2018, Nov). Savills forecasts UK residential market in the next 5 years [online]. Available at:

https://www.savills.co.uk/insight-and-opinion/savills-news/170245-1/savills-forecasts-uk-residential-market-in-the-next-5-years [Accessed 16/07/2019].

4)       Savills Research www.savills.co.uk, Oxford Economics, (2019, Jul). Savills Housing Market Update [online]. Available at:

https://pdf.euro.savills.co.uk/uk/residential---other/uk-housing-market-update---july-2019-(1).pdf

& https://www.savills.co.uk/research_articles/229130/286333-0 [Accessed 16/07/2019].

5)           Nationwide Building Society www.nationwide.co.uk, (2019). House Price Index June 2019. [online]. Available at: https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Jun_Q2_2019.pdf.

6)           Halifax , https://static.halifax.co.uk, (2019, 5 Jul). House Price Index, June 2019. [online]. Available at: https://static.halifax.co.uk/assets/pdf/mortgages/pdf/June-2019-Halifax-House-Price-Index.pdf.

7)           RICS https://www.rics.org, (2019, Jun). UK Residential Market Survey, Jun 2019. [online]. Available at: https://www.rics.org/uk/news-insight/research/market-surveys/uk-residential-market-survey/ .

8)           Times Newspapers Limited 2019 www.thetimes.co.uk (2019).Sunday Times - Best Places to Live 2019. [online]. Available at: https://www.thetimes.co.uk/article/best-places-to-live-sunday-times-3qkwjnvrm.

 

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