With the uncertainty of Brexit still looming over the UK and the October 31st deadline quickly approaching, it should come as no surprise that the housing market continues to feel the negative impact of Brexit.
Following another round of fruitless negotiations, protests, a change in prime ministers, and a prorogued Parliament, it seems that Brexit continues to remain a major issue in the country, affecting most industries and markets. As we have already seen, this has also cast doubt over the UK property market, leaving both sellers and buyers feeling uncertain about what they should do, and whether now is the right time to be putting their properties on the market or indeed making a big purchase. With daily headlines reporting on falling house prices and lack of significant growth, it’s easy to see why both buyers and sellers have lost confidence in the UK property market over the past few months.
However, in the midst of all this chaos, it’s important to look at the fact and figures, rather than relying on newspaper headlines for an accurate reflection of how Brexit has impacted the UK housing market. Following the newest developments, here are the latest updates on how this political uncertainty is affecting the market growth rate, and why Brexit could actually put prospective buyers in a better position to negotiate.
Slowest Annual Growth Rate Since 2012
According to data gathered from the Office for National Statistics (ONS), the UK housing market is currently experiencing its slowest annual rate of growth since 2012 – when it was still recovering from the recession. Figures show that in July 2019, house prices rose only 0.7% in comparison to the previous year. While it’s comforting that the market is still growing rather than shrinking, this is the lowest annual growth rate that the UK housing market has experienced since 2012 when it was at an even lower 0.4%. This is a sharp decline from the figures reported earlier this year when the House Price index showed an annual growth rate of 1.7%, which was itself reported as one of the lowest rates in recent years.
While this figure relates to the UK as a whole and regional growth varies, it paints a fairly accurate picture of the negative impact that the Brexit uncertainty has had on the national housing market. Of course, this is good news for those currently looking to buy as it leaves them in a better position to negotiate sale prices and potentially pay less for a property than they would have in the past.
However, it’s not all doom and gloom for property owners either. While Brexit has certainly contributed to a slow annual growth rate, it’s important to note that the market is still growing, house prices are simply increasing at a slower rate than expected. According to ONS data, the North East and the South East were the only regions where property prices actually fell, dropping 2.9% and 2% respectively over the past 12 months.
Falling London Prices Contributing to National Figures?
We have previously written about London house prices falling and it is clear that this has affected the national overview of how the property market is faring. Earlier on in the year, data released by ONS showed that house prices in the capital fell 4.4% year on year – the largest drop the property market in the capital had experienced since 2009, following the recession. More recent data from Rightmove echoes this, as the company’s September price index showed a 2.2% drop in asking prices compared to the previous month.
Of course, property prices in the capital remain the highest in the country despite this slump, coming in well above the national average. While the current slump in the capital can be partially blamed for the overall low national figure, along with Brexit, London isn’t that much more accessible to buyers now than it has been in previous months. Currently, inner-city properties have an average selling price for £739,541 while properties on the outskirts of the capital are selling for an average of £507,562. Both prices still a world away from the national average sale price of £232,710.
What Brexit Means for Prospective Buyers
The headlines have heavily focused on the negative impact of Brexit on the UK property market, but for first-time buyers, this could actually be an advantageous time to get on the property ladder. As the rate of growth for property prices continues to slow and houses remain on the market for longer and longer, the country is definitely in a buyer’s market right now.
What this means for prospective buyers is that they are in a strong position to negotiate the final sale price as sellers will be eager to get their properties off the market sooner rather than later. Combine that with the numerous different government schemes available – particularly for first-time buyers – and Brexit could actually be seen as having a positive effect, it’s all a matter of whether you are currently looking to buy or sell.
Plenty of New Property Developments Despite the Current Slump
Despite what the headlines would have you believe, the UK property market is still fairing well, albeit at a much lower rate than expected. While it is true that yearly growth is down and London property prices are actually falling, there is still plenty of confidence from investors and new projects are being commissioned all over the UK.
Here at Blackmore Homes, we currently have a number of live property developments. Offering something for everyone, whether you prefer the quiet country life or are looking to relocate to a vibrant city, our new build properties include modern properties in some of England’s most sought after locations.