Unsurprisingly, the market is extremely cautious due to the unknown details of Brexit. The London property expectations according to Rics are:
1. The number of house sales will fall to around 1.15 million, a drop of 5% compared with 2018 and sharply below the 1.7 million that changed hands in 2006, the year before the financial crisis.
2. Prices are also expected to flatline nationally, as London and the south-east experience a slight drop and Northern Ireland, the north-west, Scotland and Wales maintain “solid momentum”.
3. The key issue is the ceiling for affordability -which has been reached in much of the south.
“House prices are now a greater multiple of earnings than at any point since records began,” said Rics. “Such high house prices are shutting more and more people from accessing the market and forcing others to save longer for a deposit.“Even for those who could in theory afford to buy, current prices may still be off-putting. Unfortunately, there is little reason to anticipate a material improvement in affordability next year either.”
Whilst many people anticipate a price drop next year, the warning of a 30% price drop by the Bank of England (should a ‘no deal’ Brexit take place) is not shared by others: “Sellers are thin on the ground, limiting choice for buyers and the likelihood of a price crash,” says The Guardian.
This is reinforced by London’s 1.8% seasonal slip last month, with is the smallest November to December decline for five years. Homes and Property stated that: “Tt's not a sign of an improving outlook but rather a dramatic reduction of properties available to buy.”
According to Rightmove, the number of homes being listed for sale has plummeted by 19% compared to this time last year, which has helped to fuel the comparatively low five-year drop in asking prices.
“There is a myriad of factors the influence house prices,“ says Jason Dyer of JTM Homes. “Beyond Brexit, inflation and interest rates will influence affordability and therefore demand. In every property market there are opportunities. If you’d like to explore the options, let’s talk.”