Great news for buyers
*This blog was updated on 03/09/2019
Whether you’re buying, letting or selling your home, you’re probably thinking about your next move. In which case, this guide could help you. Our latest biannual report looks at the UK’s housing market over 6 months and gives us a better idea of what to expect in 2019 as we head towards 2020. By identifying trends, we’re able to help you make the best decisions going forward.
UK housing market overview
The Prime Minister’s commitment to leave the European Union – deal or no deal – by 31st October might have you wondering if now’s the best time to make a move? If one thing’s certain, our report shows that Brexit still plays a large part in influencing the market in a number of ways.
High employment and good mortgage deals continue to feature in these uncertain times with good prospects for buyers. Read the report here to find out more and also see what the last six months have meant to sales, mortgages, lettings and new builds.
Read on for an overview of the report. Otherwise, get in touch if you’re looking to move and need expert, friendly advice – we’re happy to help.
Residential buying and selling
Buyer interest is down nearly 13% compared to last year. Brexit’s distracting the market – especially new customers who’d otherwise be registering to buy. A drop in sales at the beginning of the year steadily improved from -10.5% to -6% by June and continues to show signs of recovery going forward.
While it may not be the best news for some sellers, most buyers will be glad to hear that house prices have dropped by 1.18% – a figure that’s sure to excite the market. The good news is that the market is still moving… just slowly.
Rightmove suggest that the average time to sell a property in the South East is 69 days and 74 days in London, which is higher than the national average of 59 days. It appears that we have fewer buyers in the South East, which on the one hand means that homes are taking longer to sell. But on the other, buyers are spoilt for choice.
Looking ahead – let’s wait and see what happens on 31st October…
Lenders are feeling generous, indicating a healthier market ahead. And Brexit hasn’t slowed new mortgages and remortgages since our last report. People are still seeking deals to buy homes, opting instead for longer fixed-rate terms, which lenders are happy to provide.
We’ve seen a surge in first-time buyers and our report looks at why we might just be seeing the start of another revival. We know that the typical first-time buyer is 32 with an average deposit of about £50k. This money often comes from savings but is typically topped up by the Bank of Mum and Dad or the Government’s Help to Buy scheme.
There’s good news if your deposit is smaller, your parents are cash-poor, asset rich, or you don’t qualify for Help-to-Buy. Lenders are responding to these issues with equity release schemes that skirt Stamp Duty. Also, many mainstream providers are offering 95% mortgages which is great news.
Finally for mortgages, a steady 2% inflation and low unemployment means consumer confidence and increased borrowing, which Brexit isn’t affecting. There’s obvious uncertainty, but young people are still keen to buy their first home and won’t let Boris put them off. Find out more in the report.
Landlords – we know that it’s been a bumpy few months. Since our last report, the Lettings sector has undergone some big changes. Many were concerned that the Tenant Fee Act 2019 meant landlords would pass on added costs to tenants through increased rents.
We noticed that month-on-month, rents between January and May actually decreased by 3% before increasing 3.4%, just in time for the fee ban in June. It’s too early to tell if this will be a common trend, but with landlords facing additional costs, we wouldn’t be surprised. And it’s what has been widely predicted.
Reduced start-up costs have brought many new tenants out of the woodwork. Our report found that we had a 19% increase in new potential tenants. Demand remains high.
Land & New Homes
Existing and pending investors will be glad to hear that developments remained stable over the previous period. Interestingly, customers are taking longer to make up their minds – visiting the plot 3 or 4 times – before deciding and reserving. Despite the cautious approach, Kent has seen a significant 56% rise in new reservations compared to last year.
Help to Buy continues to boost the New Build market. In Kent, 64% of sales use this scheme and 30% do so in Sussex. Looking ahead, Help-to-Buy changes its criteria in April 2021 to just first-time buyers, before ending in 2023. Statistically, 81% of the buyers using Help to Buy are first-time-buyers already, so the impact of the changes due in 2021 could be minimal.
Many are happy – there’s a demand for new homes and lenders are willing to provide good deals for buyers and investors to buy them. This ultimately keeps the market moving and we’re hopeful it will do so for a while.
Summary of the UK housing market
As you can see there’s lots of change over the last period and it’s likely to continue as we approach and pass October 31st, deal or no deal. If you’re unsure – and it’s understandable that you might be – we’re here to help with impartial advice.
Want to learn more about the current state of the housing market? You can download the full report using the form below: