UK Housing Markets, Brexit Impact and Other Uncertainties
07 Jan 2019
UK Housing Markets
Property experts believe the prospects for the first quarter of 2019 remain muted, but the price may increase once the Brexit issue is resolved. 2018 was one of the most difficult years for property markets in London that largely remained suffocated due to Brexit and economic uncertainties.
Growth in UK house prices was reported in November 2018 after a five-year low in October. Still, experts believe there are many things to look at - broader economic uncertainties, borrowing costs, and unemployment, before investing.
On average, the prices in London lowered at the rate of 1.7 per cent, and in the east of England, the prices fell by (average) 0.5 per cent in 2018. However, the impact of Brexit is not just visible in the capital city; it is also hurting Ireland's property market, where the prices flat-lined in the last quarter of the year after reporting significant growth.
The property price in Scotland and Wales increased more than the national average, and experts believe the house price will remain flat-lined in the next year and register growth between 0 to 2 per cent.
Changes in EU Bills and Acts
The UK will leave the EU on 29th March, and several bills and acts will be modified or negotiated, such as the withdrawal act, trade bills, cross-border trade act, immigration bills, environmental bills, etc.
This year will implement a corporation tax on non-UK resident companies on the sale of UK non-residential properties. In addition, bills favouring tenants, such as the Tenant Fees Bills, are under progression, and it is expected to be effective in 2019.
Other Events Affecting Property Markets
Growing population, long-term mortgages, help-to-buy and lack of stock have kept the market attractive to many new buyers. If the uncertainties settle in a few months and if the situation of employment, currently at a 40-year low, continues, it will create scope for higher activities in the housing sector in 2019.
Major events such as stretched affordability, general elections, Brexit, job uncertainties and tax changes are some issues affecting the residential property demands.
The help-to-buy for first-time buyers will end in 2023, and these buyers may also add up to the second home buyers. The pressure on household income is lowering, and the interest rates will grow if the economic conditions improve.
The UK Regional Cities Growth
Some UK towns reported a significant growth in property prices in 2018. These are some of the cities where the starters can look for new homes as the prices are significantly low in comparison. Wales was second in terms of the rise in property price as per Zoopla data, where the price may increase, on average, at the rate of 3.98 per cent.
The list of towns released by Zoopla shows Ryde on the top, where the property growth rate was 10.24 per cent, and the second-highest growth was reported in Smethwick of West Midlands at 9.67 per cent. Many buyers moving to these new regions are looking for good schools and job opportunities to shift.
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