As we move through February there’s more to be pleased about than simply putting behind us what feels like the longest, coldest month of the year; like the tell-tale signs of spring, we’re looking ahead as the green shoots of prosperity within the housing market start to manifest.
For the past four years, it’s fair to say that Brexit has had a monumental impact on the housing market – the economic uncertainty led to house buyers and vendors sitting on their hands and waiting for things to play out within the UK’s government.
The result of all this? As the annual housing sales data below shows since 2016, we’ve seen a 17% decrease for the same period YoY.
- Jan – Sep 2016 – 699k
- Jan – Sep 2017 – 681k
- Jan – Sep 2018 – 651k
- Jan – Sep 2019 – 600k
*Data obtained from the Land Registry
This was all beginning to feel like a never-ending headache. Until, thanks to the results of the December general election, whatever people’s sentiment towards the result, we’ve now made it into a new decade with a spring in our step or as the media have coined it ‘the Boris-bounce‘.
January is typically a busier month for the housing market and with a lot of the economic uncertainty behind us, it appears that the beginning of 2020 has seen a new wave in activity. Nationwide Building Society recently reported house prices increased by 1.9% (based on its own mortgage data, reported January 29th) which is the fastest annual rate in growth for 14 months. This means the average house price now stands at £215,897 – up £615, or 0.5% higher than in December 2019 and 1.9% higher than in January 2019.
The UK’s largest online retail estate agent Rightmove also disclosed a 15% increased in buyer enquiries between December 2019 and January 2020 based on its house price index.
Here at enact conveyancing, we’ve also seen an uplift in our own instructions – to the tune of a significant 26%. It’s very early days but a hugely positive initial sign of confidence in the market.
With such a positive start to 2020, how will the rest of the year fair for the housing market? This will depend on who you’re speaking to and while we’ve already mentioned how January tends to be a lively month of activity, there’s also plenty of associated economic factors which will ultimately define how the remainder of 2020 plays out.
While we have ‘officially’ left the EU there’s still an 11 month transition period that could impact people’s decision when selling and/or buying a property. It’s also widely noted that there needs to be an increase in housing stock to meet this newfound demand. Yet, as mortgage rates remain low there could be an argument to say that now is the time to move.
What’s more, the Government has said its first budget will be held on March 11. From a housing perspective, all eyes will be on what the Government will, if anything, offer to incentivise first time buyers. According to the latest research from the Halifax, the average UK first-time buyer purchase price rose by 9 per cent to £231,455 in 2019, while the average deposit increased by 7 per cent to £46,187.
There are a number of schemes geared towards getting first-time buyers onto the property ladder and while the previous figures are high, according to the latest research by Halifax the overall number of first-time buyers in the UK in 2019 was up by around 1 per cent from 353,130 in 2018 to 356,767 in 2019. This means that first-time buyers continue to account for more than half of all home purchases.
But while we’re seeing a sudden increase in demand, could this also leave sellers in a position to expect more from buyers and in turn drive prices up further with all the positive noise of the housing market seeing a resurgence? After all, we are a nation that is obsessed over our own housing market.
Currently, things are looking fairly peachy and the optimist within us hopes we see the market continue to grow in a steady fashion.