House price growth has fallen in England for the first time since 2012. English property is now 0.7% cheaper than it was in March 2018.
According to the Nationwide House Price Index, the UK has enjoyed an overall annual property increase of 0.7% and a monthly change of 0.2%.
In particular, UK house prices are clinging to the success of the Northern Irish and Scottish property markets with annual prices increasing by 3.3% and 2.4% respectively.
Despite this perceived buoyancy, all home nations, apart from Scotland, are experiencing a significant slowdown in the market when compared with the annual percentage change in Q4 of 2018. Since that time, price growth in Northern Ireland has dropped by 3%, 4% in Wales and around 1% in England.
Guy Gittins, Managing Director of Chestertons, commented:
“Although there was an overall modest rise of 0.2%, London was the weakest performing region in Q1 with an annual 3.8% decline. It was almost inevitable that the uncertainty of Brexit would drag property prices down, especially as the date gets closer and many buyers take a ‘wait -and- see approach’. However, we have experienced an incredibly busy start to the year, with a sharp increase in buyer registrations, viewings and offers throughout Q1, which reflects pent-up demand and suggests that prices are now at a level that buyers are comfortable buying. I therefore see this drop as a temporary blip, and expect prices to recover once the market has more clarity on Brexit. Over the medium-and long-term, London property has outperformed most other asset classes and we believe it will remain a solid investment, regardless of the Brexit outcome.”
Iain McKenzie, CEO, The Guild of Property Professionals, said:
“Earlier in the week the Commons failed to agree a way forward and we have a third meaningful vote being staged, so some people will continue to simply sit on their hands until we have some sort of progress in negotiations. Brexit has created some pent-up frustration, but once we get a decision, whichever way it goes, we are likely to see an increase in activity as homeowners who have played the waiting game jump into action. There has been so much talk about Brexit and its impact on the housing market, but this is evidence that a proportion of the country have had a ‘let’s get on with it’ attitude, despite the economic situation. The fact that there has been an overall growth of 0.2% is a testament to the housing market and its resilience even during tough climates.
“Regional influences are also extremely significant here. We recognise that London and the South East have been showing signs of distress, but other areas (particularly the Midlands and the North East) have experienced a much more active market.”
Robert Gardener, Nationwide’s Chief Economist, said:
“Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February. While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.
“This trend is not entirely unexpected, however, as it follows several years of sustained outperformance which left affordability more stretched. Policy changes that have impacted the buy to let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.
“More widely, prices across the South of England, and to a lesser extent in the Midlands, are also well above pre-financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels. However, prices in Northern Ireland are still more than 35% below the all-time highs recorded in 2007.”
Sam Mitchell, Chief Executive Officer of Housesimple, said: “This is likely to be the pattern for the foreseeable future, until the European Union situation is resolved at least, as the impact of protracted Brexit negotiations drags more heavily on the London market.
“The market would have preferred a decision one way or the other. Instead, we are now in this state of short-term limbo leaving many buyers and sellers unsure what to do. Normally, we would expect to see a spike in transaction levels around this time as we enter the traditional Spring bounce period, but with the extension to the EU leaving date, the bounce is likely to be a little subdued this year.
“Saying that, savvy sellers could see this as a short window of opportunity to steal a march on the competition, as more homeowners choose to wait and see what happens with Brexit negotiations in the next few weeks before marketing.”
Do you think the market will pick up following a definitive Brexit outcome? Are buyers reluctant to enter the market at the moment?
