...

Prices rose again in December – for the fifth month in a row – up 0.3%, or £875. Annual price growth continued to slow, however, and stands at its lowest level since April 2012, at just 0.6%.  In nominal terms, average house prices are up by £1,690 over the last twelve months, meaning the average property price in England and Wales at the end of the year stood at £306,647.

As we show in this release, the housing market in England & Wales remains subdued, albeit with strong regional and local variations across different regions, cities and local authorities. Local detail has thus become ever more important, and this remains a key part of the monthly LSL Acadata release. There is little to suggest that the pattern we set out below is going to change much over the next few months, although clearly the continuing uncertainty surrounding Brexit provides an important backdrop. Owners are reacting to that by combinations of staying put and possibly improving or extending in situ, and re-mortgaging to secure the lowest possible fixed-interest rate loans – thus locking in what certainties they can find. The fact that house prices in many parts of England & Wales are falling in real terms remains of limited interest to most participants, at least while nominal (actual) gains are still being recorded.

Clearly there are some big “ifs” in such a synopsis. Not surprisingly, there are mixed views of what 2019 will bring, and many are caveating their predictions by saying that much depends on how Brexit plays out. Many would concur that agreement on a deal would see a bounce in demand. The range of price predictions by the main analysts for the UK for 2019 runs from minus 1% up to plus 2.5% – with most but not all expecting continued falls in London. 2020 is generally seen as a year of recovery, although the precise timing will very much depend on the degrees of clarity emerging around the macro-economy.

For those who are buying the picture is quite rosy. There have been some encouraging signs that the first-time buyer market will continue to grow, and that access to home ownership has begun to improve modestly. Sadly, it is still the case that despite the roughly 370,000 FTBs (First Time Buyers) in 2018, there is still a widely-held perception that younger people can’t access the housing market. Without doubt, it remains difficult or even close to impossible for some – especially if there is no parental help – but this is not a universal truth. Similarly, while we see periodic comment on an impending market crash, the evidence for this does remain weak at this stage. Interest rates are seen as the big threat, alongside unemployment. Both may rise in 2019 but only in a gradual fashion, and not enough to threaten the whole market. We are seeing builders selling new homes at discounted prices to housing associations in order to keep clearing their markets for new supply, but again this is still at the low end of the scale.

(Source – LSL house price index December 2018)

The information contained within was correct at the time of publication but is subject to change.

Seraphinite AcceleratorOptimized by Seraphinite Accelerator
Turns on site high speed to be attractive for people and search engines.