Is 2020 Likely to Bring a UK Property Market Boom?
Predicting the future of the British property market has always been a difficult task. Now, with Brexit due shortly, a lot of people are wondering whether 2020 will see prices start to rise more sharply again. So, with all this in mind; what do the latest figures and predictions suggest might happen in the next year?
House Prices Have Remained Largely Steady in 2019
The sluggish economy and uncertainty over Brexit have combined to keep UK property price growth at a modest level this year. The latest figures show a mere 0.9% rise in the cost of buying a property since October last year.
The average UK property now costs £232,249. This follows a fairly flat period during much of 2019, with a 0.1% drop in the last month and a 0.2% increase if we take the full quarter into account.
Parts of London have seen the poorest results, with prices in the City of London and Westminster falling by 10.8% in the last 12 months. However, it is true that some parts of the capital did register growth during this period.
It is also worth noting that this is the lowest overall October increase in house prices since 2008. Despite this, the market remains strong in terms of sales. The month of September saw the sale of over 101,000 houses. This was 5% higher than the total from the previous month.
The Bank of England noted a 0.4% rise in mortgage approvals in September, with 65,919 home loans approved during the month. The Trussle mortgage broker site reflects the buoyancy of the market, with mortgage- seekers able to choose from 12,000 deals from 90 lenders.
What Does 2020 Hold in Store?
While house prices are fairly steady, there seems to be no evidence to suggest that any sort of property crash is on the horizon. Indeed, some analysts suggest that the market may experience a sharp boost once the uncertainty over Brexit and the general election is finally over.
Employment figures have been fairly consistent too, although 58,000 more people were out of work after the most recent quarter. The economy seems to be in good shape but it still isn’t exactly clear when consumer confidence will begin to rise again after a difficult 2019. The underlying strength of the economy suggests that this could be just a matter of time.
Potential home-buyers will also be looking at the interest rate situation. The Bank of England have held the rate steady at 0.75% since August 2018, but there have been suggestions that it could be cut soon. Michael Saunders, one of their policymakers, recently stated that “it is quite plausible” that the next interest rate movement is downwards.
What Does This Mean for Homebuyers?
It is impossible to know what the housing market will do next, with variables such as Brexit, the interest rate changes, and general elections on the horizon. As always, those who make wise property investments will be those who choose the perfect moment to buy.
For anyone who simply wants to buy a family home at a reasonable price, the recent price slowdown has been very welcome. For anyone looking to make a fortune, there are mixed signs to take into account before deciding whether 2020 could be the year of strong price increases.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.