2018 was pretty tough on the UK property market, but the question is; will 2019 fare any better? Our platform manager Ant Beddows reveals his property predictions for the year ahead.
The uncertainty around Brexit has already had a significant effect on property over the last year and until Britain reaches a firmer agreement on the terms of our exit from the EU, it’s likely that the property market will continue to suffer. In 2018 many people put off both buying and selling homes as they awaited the outcome of Brexit negotiations and this caused a contraction in both supply and demand, seeing London house prices drop around 0.2% and homes in the East of England taking a 1.1% hit.
Sadly, as the ambiguity around Brexit continues as we move into the new year, house prices may struggle to recover and we expect the property market will only stabilise when we have conclusive clarity over the future political agreement with the EU. The Bank of England governor Mark Carney shocked the press recently by predicting that, in a worst case scenario, a hard Brexit could cause a further house price drop of around 35%. That said, it is unlikely that this will be the case given that there is still a huge requirement for housing across the UK and non-London areas remain less effected by the political situation.
For the brave, there will be some stellar deals out there for those looking to buy for the first time or equally capitalise on a soft market, but that doesn’t come without the risk of further pricing corrections (down or up) following the final decision on Brexit. All in all, uncertainty will remain until we have final clarity on our exit from the EU.
Regional capitals will continue to grow
Despite the doom and gloom that Brexit seems to be causing, the UK’s regional capitals have fared better when it comes to property price growth, with some showing house price growth comfortably above 5%, and we predict that this will continue into 2019.
With multiple regeneration projects throughout the UK, regions including the Midlands, South Wales and the North West are predicted to outperform the rest of the UK’s property market.
For example, Manchester benefits from a huge student population which helps to keep demand for property high and with recent development projects including Salford Quays and the extension of the Metrolink tram system, property in Manchester has never been more desirable. Trends also show that this demand will cause rental prices to continue to increase in the near future.
The Midlands is also gaining popularity amongst Londoners who are being forced outside the capital, and with the benefit of HS2, commuters will be able to get to London in just 50 minutes. In addition to this, Birmingham will be hosting the 2026 Commonwealth games, which is likely to breathe new life and improved infrastructure into the region that is already being busily developed, which is predicted to bolster house prices and rental yields along the way.
PropTech will boom
2018 was a great year for PropTech with the emergence of a number of brands that are helping to disrupt the old-school property industry and bring it firmly into the 21st century.
We’ve seen PropTech take major strides when it comes to buying, selling and renting houses and we predict that 2019 will see technology changing the way that we build new properties too – with areas including operations, materials, safety, energy efficiency and financing all holding huge potential for growth.
Equally, the power of data will be increasingly central to this PropTech growth and in 2019 we expect data to become a key tool for many property investors, developers and experts alike to navigate the unpredictability and highly localised fluctuations in our property market.
As the housing crisis continues and generation rent is finding it harder to get on the property ladder, we predict that in 2019, PropTech will be highly focused on tackling UK housing shortage and alternative ways to allow first time buyers to purchase a home.
2018 was a difficult year for property in comparison to the growth we’ve seen in recent years, but despite this, we believe that there is still plenty of potential in the UK property market. So, whether you’re planning on buying your first home in 2019, bolstering your property portfolio or dipping your toe into the world property investing, there are great opportunities to benefit from UK property in the coming year if you know how and where to look.