As we head into a new year, industry experts turn their minds to the annual predictions and try to look into their crystal balls. With Brexit currently dominating the headlines, many are talking and writing about the potential impact on the property market. While Brexit itself might not directly affect the domestic marketplace, it has reduced people’s confidence when it comes to making major financial decisions. So, together with other negative economic news we’ve had this last year, including some job losses and pressures on high street businesses, Brexit has given people a reason to put off moving until things have settled down or are at least clearer in which direction we are heading.
At the same time, many don’t have a choice about whether and when to buy and sell. People typically move because of a major change in life circumstances, such as an expanding family or work relocation.
For those who have to move, this may be a less-than-ideal time to do it. However, for investors, economic uncertainty can offer great opportunities to secure discounted deals that don’t tend to be available during more settled times, so now could be a good time for those who have capital to invest to secure a bargain. It is predicted that 2019 will see a further shift from a seller’s market to a buyer’s market. It is hoped that post leaving the EU in March that we see a quick recovery as first time buyers look to get on the property ladder.
One must keep in mind that the property market differs across the UK and although the prime central London market has been steadily falling since 2014 the Yorkshire market has remained healthy. Quality of life, improved transport links and commercial relocation of some major businesses from the South East to the North has helped stabilise the Yorkshire market. This trend is likely to continue into early 2019 while Brexit is still unresolved and unpredictable, with growth in the North offsetting the year-on-year falls we’re currently seeing in London and the South.
From a rental perspective, OBR forecasts in the 2018 budget suggested wage growth should be higher than inflation over the next few years. As rents are typically tied to wage growth, this is good news for landlords, who could see inflation-beating rental growth as well, something that hasn’t been easy during the credit crunch period.
If you are planning on renting, the most important thing is to secure a property as soon as possible and if you are already a tenant, try to stay in your current home. This is because stock levels are expected to reduce while landlords work out whether to stay in the market or sell. This is mainly due to the buy-to-let tax relief changes made in 2016 and the impending Tenant Fees Bill (banning all tenant fees) due this year where it is predicted that the associated costs will be pushed onto landlords. This increase in costs could see a linked increase in rental prices.
Although we head into a year of unusual political instability, there are some positive trends in the property market forecast for 2019. Indeed, bricks and mortar have historically remained a solid long term investment and the UK as an island of limited building resource, demand is still outstripping supply.
For more information or investment advice please contact one of our experienced team on 01904 393989.
