It is forecast that the rise in economic and political uncertainty is likely to ensure that average asking prices in the UK will not rise in 2019.
The national housing market is unlikely to be affected by the slowdown, despite zero growth forecasted by the outlook from property portal Rightmove.
Despite the predictions, it is believed that there will be some regional disparity across the UK, with the more buoyant Northern half of the UK possibly seeing asking price rise by between 2 and 4%. However, the national average is likely to be brought down by the South, where sellers may be forced to reduce their asking prices.
The London commuter belt is highlighted by Rightmove as a zone which could see particularly sharp falls in asking prices, with decreases of around 2% forecasted. Meanwhile in Greater London the market is predicted to slow from its current annual rate of decrease from -2.4% to an average fall of -1%.
‘While buyer affordability is stretched in some parts of the UK due to house price rises having outstripped wage rises, the underlying fundamentals supporting the housing market are currently sound,’ said Miles Shipside, Rightmove director and housing market analyst.
He pointed out that the key to keeping property prices broadly in line with current levels is positive employment data and affordable mortgage interest rates at high loan to value ratios.He explained that while buyer sentiment has been helped by recent interest rate rises not being fully passed on, and this may continue to be the case, it will depend on healthy competition among lenders keen for new business.
‘The Mortgage Market Review established in 2013 has also been a limiting factor on excessive property price increases by prudently restricting buyers’ borrowing power,’ he added.
Additionally, prices in the North will continue to rise because of the overall more modest increases over the past decade, according to Shipside. ‘We predict that these areas will continue to see price rises, though tempered by affordability constraints,’ he said.
By contrast, prices went up by an average of 40% in regions in and around the influence of London over a five year period. ‘Consequently, we forecast that these previously booming areas will continue to see modest downward price re-adjustments in 2019,’ Shipside explained.
He also pointed out that there appears to be an air of negativity from home movers as a result of ongoing political uncertainty, and a clearer outlook would make the market more active.
‘Whilst uncertainty traditionally deters some discretionary movers, particularly at the high end of the market, there are many would-be buyers and sellers who will be getting on with their lives and will be keeping the market moving,’ Shipside concluded.