Although the UK is still on course to leave the EU on 29th March, at the time of writing, the exact nature of the future relationship will still be up for debate and negotiation for a period of several years, according to even the most optimistic estimates.
But how is this on-going uncertainty likely to impact the UK housing sector? It appears in the ‘pre-Brexit’ phase at least, the lack of certainty across the sector for developers and financers to buyers and sellers, is helping to create a buyers’ market.
Lower house prices
The UK housing market has seen sellers with the whip hand for so long, that a different view now seems counter-intuitive, but recent figures on available stock, the percentage of first-time buyers, the rise in house prices and the number of new homes being built, tend to reinforce an alternative view.
Constricting supply drives prices higher, so it is perhaps no surprise that the massive increase in available housing stock across the UK in December 2018 could help to push prices lower – good news for first time buyers.
The figures came from NAEA Propertymark, which found the amount of housing stock available had risen by 20% between November and December 2018.
At the same time, the index of online estate agents HouseSimple, which focused on 100 large UK cities and towns, found that new property listings had risen by 64% between December 2018 and January 2019 – an increase from 31,825 listings to 52,207.
New homes on the up
Importantly, according to estate agents Savills, there has also been a marked increase in the number of new homes being built in England.
In the last quarter of 2018, there were 238,000 being built, which represented a 12% increase on the last quarter of 2017, a similar rate of growth to that achieved in the previous two quarters, and one which, if the number of projects being started is an accurate guide, should continue into 2019.
Although the strongest growth in new-builds was still delivered in the traditional property hot-spot of London, growth in general was up in all regions of the UK when compared to the last quarter of 2017.
A key driver of this growth is the Help to Buy equity loan scheme, with transactions making use of the scheme rising by 2% in the last quarter of 2018, and by 15% when compared with the same quarter in 2017.
The combination of more new homes and Help to Buy probably goes some way to explaining that the number of first-time buyers in 2018 was 372,000, which was more than 50% of all house purchases made using a mortgage according to the Halifax First-Time Buyer review.
This significant increase in activity amongst first-time buyers is certainly reflected in our own business, which has undertaken a similar rise in conveyancing instructions dealing with first home purchases.
Higher house prices
During the decade since 2008, the price of the average first home has risen by 39%, from £153,000 to £212,473, with the average deposit up by 57%, to £33,252.
These figures are daunting, but according to the Halifax, house prices in January 2019 fell by 2.9% from December – more good news for buyers.
While month on month prices are often more volatile than those measured in the longer term, the same survey found that the average price of a home had only risen by 0.8% during the course of the last year.
Put these factors together – more houses, active first-time buyers and a drop in prices – and you have a market which should appeal to those looking to buy property rather than those keen to sell.
With little idea still of what might happen with Brexit, it certainly appears that for those buyers holding back on the basis of uncertainty, now might be a good time to act and make their move sooner rather than later.
And remember, if you are considering buying your first home or moving to a new house, we have an experienced conveyancing team, ready to get the ball-rolling. Contact Emma Holmes in our Residential Conveyancing Team at email@example.com or call 01543 267 997