House Price Growth at Six-Year Low
The UK housing market has nearly ground to a halt as house growth price stalled in January. This marks almost six years since the property value increase has been this slow — only the most recent among a slew of signs ushering in an undeniably cooling property market.
According to data from the Office for National Statistics, average house prices in the UK went up by 1.7% last year and continued on to January 2019. In addition, it was also recorded at 2.2% in December 2018, down from 5.1% in October 2017. Should this trend continue in the near future and prices proceed to go downhill, it is predicted that the country will suffer its very first fall in prices since the UK’s post-crash property slump in 2011 before the end of 2019.
In the entire UK, London seems to be taking the biggest hit in this worrying price slide. Home prices in the capital took a 1.6% dip over the year to January, which is altogether a bigger slump than the 0.7% decrease shown in December 2018. Behind the capital, properties in the east of England also suffered as prices fell 0.2% over the year.
Certainly, the Brexit phenomenon is a critical factor for buyers and sellers. Because of the deepening uncertainty over the country’s future outside of the region, numerous buyers have started to flee from an otherwise healthy landscape that once offered stable employment growth and continued borrowing costs. Still, the pros aren’t enough to outweigh the risks, and even the Nationwide House Price Index confirms this bleak economic forecast has indeed impacted buyers’ sentiments.
Despite the many concerns surrounding the post-Brexit world, however, there are a few silver linings in sight. Mortgage broker Ray Boulger told the Financial Times that it’s the same uncertainty that is keeping interest rates much lower than expected. Because householders have been rushing to remortgage and lock in these “competitive rates,” remortgaging has hit its highest peak in almost a decade. This might continue well into 2019, which could be a boon for some investors.
For first time buyers, the market fluctuations might also be a golden opportunity to finally get a foot on the property ladder. For those looking to do so, there are key factors to consider in ensuring that they clinch a good investment. Aside from personal finances, FXCM’s Economic Calendar highlights the various global events throughout the year, which can help buyers make informed market decisions. The British Bankers’ Association’s Mortgage Approvals, for one, are considered the leading indicator. Anyone looking to buy or sell should monitor it, which will reveal bullish or bearish results. Outside of these notable dates, other factors to take note of are undergoing infrastructure investments and changes on the high street that can help you identify long-term investment prospects. Whether you’re looking to rent out a flat as a newly minted landlord or finding a Professional HMO for your long-term vision, these are all things to keep on your radar.
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