Asking prices set to be flat at a national level in the UK in 2019
Average asking prices in the UK are unlikely to rise in 2019 as economic and political uncertainty is set to rise and continue to affect the housing market, it is forecast.
Overall the housing market is sound and the slowdown will not affect the national as a whole, according to the outlook from property portal Rightmove which forecasts zero growth.
Parts of the more buoyant Northern half of the UK could see asking prices rise by 2% to 4%, but the national average will be brought down by new sellers adjusting their prices downwards in parts of the South.
In particular, Rightmove is forecasting that the London commuter belt regions could see asking prices fall by around 2% and in Greater London the market is predicted to slow from its current annual rate of decrease from -2.4% to an average fall of -1%
‘While buyer affordability is stretched in some parts of the UK due to house price rises having outstripped wage rises, the underlying fundamentals supporting the housing market are currently sound,’ said Miles Shipside, Rightmove director and housing market analyst.
He pointed out that positive employment data and affordable mortgage interest rates at high loan to value ratios are key to keeping property prices broadly in line with current levels. He explained that while buyer sentiment has been helped by recent interest rate rises not being fully passed on, and this may continue to be the case, it will depend healthy competition among lenders keen for new business.
‘The Mortgage Market Review established in 2013 has also been a limiting factor on excessive property price increases by prudently restricting buyers’ borrowing power,’ he added.
One reason Shipside thinks that prices will continue to rise in the North is because these areas have only seen marginal or relatively modest prices increases since the 2008 financial crisis. ‘We predict that these areas will continue to see price rises, though tempered by affordability constraints,’ he said.
In contrast, regions in and around the influence of London saw prices go up in a five year period by an average of around 40%. ‘Consequently, we forecast that these previously booming areas will continue to see modest downward price re-adjustments in 2019,’ Shipside explained.
He also pointed out that agents in some locations are reporting that home movers are being negatively influenced by the ongoing political uncertainty, and a more certain outlook would obviously assist market sentiment.
‘Whilst uncertainty traditionally deters some discretionary movers, particularly at the high end of the market, there are many would-be buyers and sellers who will be getting on with their lives and will be keeping the market moving,’ Shipside concluded.