Will the BORIS BOUNCE spark HOUSE PRICE FIREWORKS?
Now the election’s out the way, your definitive guide to whether you should buy or sell in 2020
THE UK housing market has been slowly suffocated over the past three years due to the interminable uncertainty – but now, estate agents are hoping for New Year fireworks.
Before the EU referendum in June 2016, the annual growth rate of property prices was more than 8 pc.
It has steadily declined ever since: the latest Office for National Statistics (ONS) data shows prices rose by just 1.3 pc in the year to September.
Both buyers and sellers have been reluctant to make a move, fearing prices could soar or plummet at any moment.
It is hoped the emphatic Conservative General Election majority could now herald a clear path forward, whether you like its direction or not.
Property website Rightmove has already upgraded its growth forecast for 2020 to 2 pc, as it expects the result to give movers ‘a window of certainty’.
Last week’s election also spurred an immediate surge in agent share prices, with Purplebricks and Savills up 9pc and 13 pc respectively by the end of Friday.
The market is now hoping to capitalise, and one agent in the North East of England has even predicted price growth of 5 pc by the end of 2020.
Others are more reticent. Savills forecasts nationwide growth of just 1 pc because of doubts over Britain’s trade deal with the EU and squeezed household finances.
So, if the mood is one of cautious optimism, what should you do if you are looking to make a move in 2020, and which regions might prove most profitable?
Money Mail spoke to estate agents nationwide to find out.
UNCERTAIN OUTLOOK FOR SCOTLAND
IN Scotland, the housing market has fared better than much of the UK since the Brexit referendum.
The UK House Price Index showed the average price of property north of the Border rose by 2.8pc, from £148,621 in May 2018 to £152,801 in May 2019. The increase was the third highest of any part of the UK, after North West England and Wales.
In Edinburgh, however, prices this year remained the same as last.
One estate agent said it was difficult to tell how the election results would affect house prices in Scotland.
Claire Flynn, from ESPC, said: ‘If a Brexit deal is now agreed and delivered by the January deadline, this may help to alleviate the political uncertainty that has been affecting the UK in recent months. In turn, this may help Scottish buyer and seller confidence to grow as 2020 continues.
‘If buyer demand begins to grow, this may result in rising selling prices again.’
According to Faisal Choudhry, head of Savills’ residential research in Scotland, the election result is unlikely to lead to further property price growth on top of the 2 pc predicted for 2020.
He said: ‘Last week’s election result should stimulate supply and demand among those that may have been unsure about entering the market. However, the election result is unlikely to lead to property price growth.
‘The election of a Conservative majority government is in line with the assumptions we made when we prepared our house price forecasts in November, in which Scotland is expected to see house price growth of 19.9 pc over the next five years from 2020 to the end of 2024, compared to a national average of 15.3 pc and 4 pc in London.
‘The forecasts also suggest only modest price growth in 2020 of 2 pc on the basis that some economic uncertainty will remain until a trade deal is agreed with the EU.’
ON THE MOVE IN THE MIDLANDS
THE Midlands, on the other hand, may have peaked already. Last year,
Money Mail reported how property prices in the region were outstripping the rest of the country.
In 2018, growth was around 6pc, dwarfing the usual hotspots of the South East and East of England, which rose by 1.7pc and 2pc respectively. London, meanwhile, was the only region to be in decline, with prices falling by 0.3 pc.
Commentators pointed to the number of big firms relocating to England’s heartlands. HSBC had moved its UK head office to Birmingham, while Nestle had just announced the construction of a £55million distribution centre in Leicestershire. HS2, a highspeed railway that will connect London, Birmingham, the East Midlands, Leeds and Manchester, was also said to have boosted prices. Savills predicted they would continue to rise by another 3 pc in 2019, compared with a national average of only 1.5 pc.
In reality, growth in the East Midlands slowed to 0.1pc in the year to September, while the West Midlands has staggered along at 1.6 pc.
The Brexit ennui and parliamentary paralysis that had burst London’s property bubble appears finally to have taken hold in areas that once proved resilient.
The historic market town of Daventry in Northamptonshire, for example, saw prices grow by 12.1 pc in the year to November 2018, the fourth strongest in the UK.
But it has now gone into reverse, with prices falling by 6.2 pc in the year to September 2019, the fourth weakest.
Experts say that, while the region has continued to enjoy a steady rise in movers who have been priced out of London, this has pushed out local buyers.
Last year, 45,950 Londoners left the capital and moved to the Midlands, up 2.4 pc on 2017, according to the ONS.
But the average home in the Midlands now costs more than seven times the average annual salary of local workers.
Aneisha Beveridge, the head of research at Hamptons International, says: ‘Affordability is a key driver for many first-time buyers moving and buying in the area.
‘London leavers priced out of the capital’s housing market are able to buy more for their money in the Midlands, future-proofing further moves and the costs associated with them.
‘However, for local buyers, affordability is now being squeezed. The area has also been hit by Brexit uncertainty, with a slowdown in manufacturing and the threat of redundancies – all of which has impacted housing demand.’
As ever, there are pockets that buck the trend. Richard Jones, a partner at Jackson-Stops, says performance is ‘geographically specific’. He says his two offices in Northampton and Woburn, near Milton Keynes, have fallen in and out of favour.
‘Over the past few years, it seems to be that when one is performing well, the other isn’t, and vice versa,’ he adds.
‘But we have found the top end of the market to be especially strong. Last month, we had three cash buyers fighting over a £1.25 million