Asking prices rose by 0.7% in February, the market picking up as spring approaches.
However, there is no doubt Brexit uncertainty continues to act as a drag on prices. Annual growth remains subdued at 0.2% and there was a 4% fall in transaction volumes in January when compared to the previous year (source: Rightmove).
Nationwide’s figures also show growth is stalling, with a 0.1% fall in February. Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer enquiries over the same period.
While the number of properties coming onto the market 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.”
It’s the more southerly regions – London, the South, the Southeast and the East – that have been most affected by the Brexit hiatus. Rightmove’s February figures do.
However, show asking prices in the capital have risen in anticipation of the spring market – up by 5.0% in inner London and by 2.2% in outer London.
There is anecdotal evidence that some buyers are using Brexit and low mortgage rates as an opportunity to pick up a bargain, especially in central London. Prices in those areas reached their peak in 2014 and have since softened substantially. Now there are signs they have bottomed out and are now being held back by the uncertainty over Brexit.
Rightmove director Miles Shipside’s says,
“The more expensive million pound plus boroughs of Westminster and Camden have seen the largest annual rises in London, up by 5.2% and 3.9% respectively.” And adds that buyers are now realising, “There is now relatively good value in these boroughs.”
The assumption is that once there is any certainty over what is going to happen next, the breaks will be off and prices could rise even more quickly.
In the meantime, many of the more cautious buyers are holding off making any major decisions and that is a situation that is likely to continue for several months, at least.
In a more positive development, Halifax reports that home ownership levels are finally starting to rise again – up from 62.6% in 2017 to 63.5% in 2018.
The last time they rose was back in pre-credit crunch 2005. And, with wage growth (3.4%) now outpacing house prices (0.4%), the outlook is far better than it has been for some time for first time buyers.
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