Housing market is forecast to remain weak in 2019 as agents are urged to manage vendor expectations

Commentators are anticipating another lacklustre year for house prices in 2019, with predictions ranging from a 1% drop to a rise of up to 4%.

Property website Home.co.uk predicts that average UK asking prices will be driven down by further falls in the value of homes in greater London, the south-east and the east of England.

Doug Shephard, director of Home.co.uk, said: “We don’t expect London prices to pull out of their shallow dive until 2020, and, what’s more, other regions look set to slide into negativity in 2019.

“Going forward, the major challenge for estate agents will be to manage the expectations of vendors in the growing number of regions where prices are sliding.

“Failing that, property auctions look well placed to profit from the increasing numbers of frustrated sellers in and around London.

“Brexit is not to blame. Prime Minister Theresa May’s mess is not helping, but the current post-boom hangover was ‘baked into the cake’ when the Bank of England reduced rates to historic lows back in 2009.

“Bank bailouts coupled with historic low interest rates guaranteed that the capital’s property bubble would be reinflated to colossal proportions.

“Of course, that same bubble is now deflating. Lending won’t get any cheaper and prices must correct in the aftermath of the mal-investment that always accompanies the buying frenzy.”

Halifax is more optimistic, predicting house price growth of between 2% and 4%, with the caveat that the UK exits the EU with some form of withdrawal agreement and transition period.

The lender added that it had predicted prices would grow at between 0% and 3% this year, claiming it is looking like the market has performed at the lower end of its expectations.

Its latest House Price Index for November showed annual prices were up 0.3%.

Russell Galley, managing director at Halifax, said: “The housing market in 2018 followed a similar trend to recent years. In line with our expectations, house price growth slowed whilst building activity, completed sales and mortgage approvals all remained relatively flat.

“This was driven by a combination of continued uncertainty regarding the future growth prospects of the UK economy, and the ongoing challenge faced by prospective buyers in building up the necessary deposits.

“Looking ahead, aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes. Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be pushed significantly in either direction.

“Despite current political upheaval, and on the basis that it is still most likely that the UK exits the EU with a form of withdrawal agreement and transition period, we expect annual house price growth nationally to be in the range of 2% to 4% by the end of 2019.

“This is slightly stronger than 2018, but still fairly subdued by modern comparison. However, the uncertainty around how Brexit plays out means there are risks to both sides of our forecast.

“Longer term, the most important issue for the housing market remains addressing the affordability challenge for younger generations through more dynamic house building.”

Sotheby’s International Realty says that competitive pricing will be king throughout 2019.

Guy Bradshaw, head of residential at Sotheby’s International Realty, predicts that buyers would be waiting to see what happens with Brexit before making decisions in the early months of 2019.

He said: “This was never going to be an easy year for the housing market. London in particular has faced much adversity this year, with foreign buyer tax announcements and Stamp Duty surcharges still weighing heavy on the top end.

“Residential property transactions are incredibly susceptible to changes in Stamp Duty with huge peaks and troughs closely linked to the end of tax breaks and the introduction of punitive high rates seen over the last decade.

“It is looking likely that parliament will vote on Theresa May’s deal in mid-January.

“We anticipate domestic buyers sitting on their hands in early 2019 as the Government seeks to broker a deal between themselves and with the European Parliament.

“The recent political infighting and continued uncertainty is dampening confidence, so it is essential that clear direction is provided on the UK’s future relationship with Europe and the rest of the world as this will stimulate the market and instil confidence in British buyers.”

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6 Comments

  1. ArthurHouse02

    Vendors also need to manage their own expectations

    Report
    1. ShaunAmner15

      Conversely, a difficult/falling market often encourages vendors to over price, in spite of the agent’s advice, as they think they have to build in a defence to buyers knocking their price down.

      Unfortunately though, this thinking is counter productive and just exacerbates the overall problem.

      At Trueview Property, our agents can use our reporting tools to provide hard evidence of the merits of accurate pricing whilst their vendors can use the vendor dashboard to review their data based feedback which clearly highlights any sales blockers, including over pricing.

       

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      1. ArthurHouse02

        If evidence was the deciding factor in getting vendors to market their home at an accurate price, i would have more hair.

        Report
  2. NewsBoy

    Can we please take a look at what everyone said last year? That would be much more fun!

    Pretty lease!

    Report
    1. Georgemcoy

      Yeah!!!That would be much more fun!

      Report
  3. GPL

     

    Round up the Usual Suspects!

     

    Stating the Bleedin’ Obvious!

     

    Let’s predict…… anything really!

     

     

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