The UK Property Market in 2019

Article content

• UK house price predictions and forecast for 2019+
• A stagnant market
• Areas to watch for investing in 2019+
• How investing fundamentals affect the housing market
• Conclusion

UK House Price Predictions And Forecast For 2019

The media love to paint a gloomy picture of the property market, since bad news sells, good news does not, however you should note that the majority of experts predict property prices to increase by the end of the year.

It is worth noting that when the UK voted to leave the EU in 2016, there were predictions of a total property crash, yet this has not happened.

For February, the government price index for the UK has shown that on average, property prices in England have fallen by 0.6% since January, however, London property prices fell by 3.8% whereas some areas in Northern England rose by 4%.

Compared to February of 2018, England has seen an average property price rise of 0.4%.

In Wales, property prices only fell by 0.2% since January, however since February 2018, are up by 4.1%.

Data from the official Government house price index.

The UK Average Forecast

Between now and 2023, it is predicted that property prices in the UK will rise by around 15% on average, while forecasts suggest that 2019 will see an average increase of around 1.5%.

London

London will be the area worst affected by current conditions; Savills are forecasting London house prices to decrease by 2% by the end of 2019.

However, London is a complex prediction – there are different boroughs with varying qualities, which in turn will affect the prediction.

Further to this, although overall London is predicted to decrease in price, various boroughs are predicted to rise.

North West & Midlands

The North West, East Midlands and West Midlands will show the healthiest signs of growth by the end of the year, with a 3% rise predicted for 2019. This may be in part due to various regeneration projects of houses in Liverpool and other Cities in the Midlands and Northern England.

A Stagnant Market

Current times have been testing for the UK property market with a decrease in transactions from buyers and sellers alike.

However, this means that once all of the current uncertainty has passed, transactions that have been postponed could all come at once, and could create a market bounce, i.e. a sharp increase in property prices.

Areas to Watch For UK Property Investing in 2019+

While London and the surrounding area have exhibited strong growth over the last few years, we would advise you to look in other areas if you are intending to invest for capital gain.

There are numerous property developments in progress around Manchester, Liverpool and other areas of the Midlands and North of England.

Along with property developments, various Midlands and Northern cities/areas are undergoing regeneration and are seeing an increase in population and good future job prospects.

With the completion of the high speed 1 now in sight, Midland and Northern areas are seen as much more attractive and affordable areas to live with a simple connection to the South, which could cause an increase in demand for the cheaper properties, causing property prices to increase at a fast rate.

How Investing Fundamentals Affect The Property Market

Amidst the concerns regarding the current property market situation in the UK, we would like to remind you of the basic fundamentals involved in the property market, how they have remained consistent during Brexit, and what effect they have on property prices and you as an investor/UK property news enthusiast.

Let’s take a look at the fundamentals and how they affect property prices.

Supply And Demand

This is one of the strongest elements of the fundamentals of the property market in the UK.

The ratio of buyers to sellers determines the type of market which is experienced.

What this means in terms of market forecasting, is that due to a continued high demand for property, property prices should not collapse, as there are a higher number of buyers than there are sellers, thus supporting the market.

Population Growth

Further to above, the population of the UK is continually increasing. This means that the number of buyers in the market will be increasing, thus strengthening the seller’s market.

A seller’s market provides a structure to the property market, thus stopping prices from plummeting under normal circumstances.

Cyclical Market

The property market will continually exhibit peaks and troughs. This is the same as any other investment, such as FOREX or company stocks, however the property market in the UK has historically shown a positive upwards trend.

So even though the market has not been increasing nor decreasing in present times, whether or not there is a price dip, history says that prices will eventually pick up again.

Your Personal Investment Fundamentals

• Focus on The Long Term Strategies of Investing
• Property investing is not a short term strategy to building wealth.

Over the years, the property market will experience fluctuations, however on average, property prices have continued to increase.

Regardless of whether we are about to go through a market downswing or upswing, your investing strategy should be with a long term view; i.e. in 10+ years, your property will be worth more.

Property Cashflow

Leading on from the long-term strategy, is investment cashflow.

Ideally, your portfolio should be cashflow positive in order to handle tax breaks and/or depreciation of the property and obviously to provide you with an income.

Buy to let, don’t buy to sell; While capital appreciation in some areas of the UK is a favorable investment, you should aim to build up your monthly cashflow to as high as possible rather than only invest for capital appreciation.

Emotions

When investing in the property market, or any investment for that matter, never let your emotions cloud the picture. If necessary, seek advice from a property professional.

Interested to know more about investing in the property market? If so, read our guide on property investing fundamentals.

So How do These Fundamentals Play a Part in The Forecasts of The UK Housing Market For 2019?

Firstly, it is widely known that many are holding off on putting their properties up for sale while others are apprehensive to purchase property.

However, since the market fundamentals have remained fairly consistent, by following on the past trend line of the UK property market, one would deduce that the market will continue to rise toward the end of the year, albeit at a slower rate than has previously been experienced.

Secondly, by looking at the personal fundamentals of property investment, you should not be put off from the current market trends – as stated above, while there may be a dip in property prices, overall prices continue to rise year on year.

Since investing in property is a long-game, if you are considering starting out on the property ladder or adding another property to your portfolio, there is no harm in doing so now; in 5-10+ years your property/properties value will most likely have increased, regardless of any blips in the market.

Further to this, provided that you do not over-gear your investment, your portfolio should be able to withstand fluctuations in mortgage rates, thus preventing you from being in negative equity.

Conclusion

While Brexit is causing a pause in the current market, it is likely that we will see property prices to continue to rise in the future – Market fundamentals remain fairly unchanged, or even slightly leaning towards increasing the UK housing market prices.

Remember your basic investing fundamentals and start making decisions – The more people who carry on buying/selling property, the better off the whole market will be; A stagnant market only increases concerns and decreases confidence and strength of the market.

Let us know your own predictions and thoughts on the UK housing market by tweeting us @Emc2Property.