Property price growth, particularly in the north west of England, remains strong, highlighting the continued strength of the UK’s real estate sector even during times of wider economic changes.
Summary:
- A shortage of supply continues to drive price growth in the UK property market, even as the country’s Brexit deadline nears
- Average property prices in the UK have risen on a monthly, quarterly and annual basis for the first time since October 2018, with growth and demand from buyers highest in regions such as north west England
- The performance underlines the enduring strength of the country’s real estate sector for both domestic and international investors
UK property continues to remain “resilient” in the face of wider economic developments relating to Brexit.
That’s the message from some of the country’s leading experts and agents, who point to rising prices and a supply to demand imbalance as proof of the sector’s enduring strength.
Nationally, the average property price in the UK rose by 2.8% in the 12 months to February 2019, according to the latest figures from Halifax. Prices also increased 5.9% month on month and 1.8% based on the previous quarter. This is the first-time average values have grown on a monthly, quarterly and annual basis for the first time since October 2018.
Commenting on the performance Russell Galley, Managing Director of Halifax, believes the growth is a result of a significant lack of supply of property across the country.
He also added: “People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”
Analysts have noticed a trend among some domestic home buyers of adopting a ‘wait and see’ approach with regards to buying a property before the Brexit deadline on 29th March. But Dilpreet Bhagrath, Mortgage Expert at Trussle, advised buyers not to be put off, reminding them that “there are still good offers to be had in some areas of the country”.
Furthermore, Sam Mitchell, Chief Executive Officer of HouseSimple, reminded investors that regardless of the external considerations of Brexit, the UK property is an investment sector renowned for its stability, particularly during times of wider economic change.
He said: “Even with an acceptable exit deal in place, house prices are likely to face some heavy turbulence. But it’s nothing the property market can’t take in its stride.”
Mr Mitchell also advised investors not to focus their attention on London’s property market, pointing out that sales activity continues to be highest in key regions such as north-west England, home to cities such as Manchester.
“Far too much has been made of stalling price growth in the capital and the part Brexit has played, when in fact London was already showing signs of running out of steam. The danger is that stuttering house price growth in London sets the tone for the whole country,” he said.
“And the strength of regional property markets in the north, buoyed by strong first-time buyer and investor numbers, is an encouraging sign that the performance of the UK’s housing market is not determined by what’s happening within the M25.”
Recent figures published by Savills showed that, between 2004 and 2018, it was those that bought UK property in 2009, in the immediate aftermath of the global financial recession, that made the highest returns when selling their properties last year.
With some investors hesitating, and with further fluctuations in the value of the pound expected in the coming weeks whilst the UK negotiates its withdrawal from the EU, those that make a move in the market now could achieve some of the highest returns on their investment in the coming years.
