The New Year is peak sales season for bargain hunters but are there deals on offer in the property market?
Generation rent is now the norm for many of us, but as the UK faces an uncertain future, the property market is stalling and many first- time buyers are wondering if the year to come will finally bring a chance to bag a bargain.
The ‘Brexit effect’
Uncertainty is causing growing numbers of buyers and sellers to sit tight according to last year’s UK Residential Market Survey from RICS who forecast ‘little change on the horizon’ for 2019.The survey showed that house hunter numbers are down along with numbers of properties coming onto the market, with the fastest decline in supply since June 2016. Estate agents, on average, now have just 42.1 homes for sale on their books so there’s little out there to choose from.
Looking ahead to what might happen this year, Mark Hayward, chief executive, of NAEA Propertymark, describes it as a ‘fog of uncertainty’ but he admits that, whilst the uncertainty over Brexit is causing buyers and sellers to hold off on making decisions, this could be good news for bargain hunting first timers: “This slowdown presents a window of opportunity for first-time buyers who will find more affordable properties, granting them greater bargaining power.”
Help to Buy extension
The Government’s Help to Buy scheme has been extended until 2023
which also gives first time buyers greater spending power. Compare My Move looked at how long it takes young renters in 50 British towns and cities to save a deposit for their first home and found that, by using the scheme, they could get on the property ladder two years earlier. Figures revealed that the average British renter can save enough for the 5% deposit needed for the Help to Buy loan in just twelve months
, compared to the three years it would take to save for a traditional 15% deposit. Getting on the housing ladder faster could help millennials save £10,000 on average in rent costs says Compare My Move’s founder Dave Sayce who calls it a ‘race against time in many cities’: “The scheme acts as an important catalyst for getting renters on the property ladder, and its extension to 2023 will act as a lifeline to generation rent.”
Where is best to buy?
But bargain hunters need to pick their location wisely. According to RICS, the regional picture is varied, with house prices falling most steeply in London, South East and East Anglia whilst the South West, East Midlands and North East are broadly flat. Rises were seen in Northern Ireland and Scotland, West Midlands, Wales, Yorkshire & Humber and the North West. Compare My Move’s research showed that Burnley was best for property bargains
, thanks to some of the UK’s lowest house prices with price tags for first time homes starting from £70,000. The second easiest place to get on the ladder was Dundee
, closely followed by Northern cities such; as Liverpool, Glasgow, Huddersfield, Preston and Doncaster.
Outlook for London
Property prices are falling in the UK’s most populated and pricey regions. Figures from Home.co.uk at the end of last year showed the South East and the East of England property markets sliding into the red, following in the footsteps of long-suffering Greater London. The report found that prices in the capital region have now been on a downward slide for 31 months with average house prices falling 6.3% for the same time-frame.
House hunters hoping to take advantage of sliding prices could do worse than head to the South West which Home.co.uk predicts will be the next region to slip into the red. Prices have fallen in five out of the last six months: “We expect the East and West Midlands markets to cool off during 2019 and consequential price erosion to follow. Nothing catastrophic, nor a consequence of Brexit, merely a natural post-boom rebalancing of supply and demand.”
Forecast for 2019
Many property pundits think that the fate of the UK’s housing market is tied to whatever happens in Westminster and further afield in Brussels. James Greenwood of Stacks Property Search explains: “We expect 2019 to be a good year for the property market as a decision of some sort is made on Brexit. There are an estimated 6m households living in the wrong property and the country needs to get moving. Only an end to the indecision that we have been suffering since June ’16 can free up the market. And whatever the outcome, we will certainly see a significant increase in activity.”
by Ginetta Vedrickas (Property Journalist and Columnist)
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