Economic uncertainty contributing to slow growth
Recent data from the Halifax shows that annual growth in UK house prices has slowed to its lowest rate for five years. Going into 2019, it’s looking unlikely that this is going to change, due to uncertainty around the current UK economy and wider climate, as well as low availability of new and existing properties for sale. Experts are predicting a stagnate in house prices and fall in sales, with the Royal Institute of Chartered Surveyors (RICS) expecting house sales to drop by 5%.
Whilst this can be partly attributed to the uncertainty around Brexit, leading to a significant lack of confidence amongst buyers and sellers, some experts point towards lower levels of affordability across the market, and wider economic environment in general, as a result of rocketing property prices over recent years – particularly in London and the South East. Whilst Savills has forecasted strong growth in the north of England over the next five years, a Property Wire analysis shows demand and turnover in London stagnating which, coupled with increases in property tax, could mean foreign investment in London will start to drop.
Could proptech change the property market?
Another prediction for 2019 comes off the back of the success of digital agents such as Purplebricks. Techworld recently named them as one of the top 15 innovators in the proptech world that’s changing the face of the UK housing market and it seems a trend for 2019 will see other agents within the sector moving forward by adopting digital innovations.
The key driver for this will undoubtedly be buyers’ demand for keeping costs down throughout the property purchase, as well making the process faster and more efficient, which will leave many vendors with little choice but to adapt in order to keep up with their competition.
Will holidaying at home become the new norm?
Interestingly, despite a possible dip in foreign investment in cities such as London, regional director of Stacks Property Search, James Greenwood, predicts that location of UK properties could well provide an advantage to British tourism in 2019, as investors hurry to join the growing Airbnb market. Depending on whether a Brexit deal is soon established and the fragility of the British pound, the holidaying at home trend looks like it’s one to continue further into the new year.
Investors may also find opportunities within larger rural properties, as demand for these lots has been slowly on the rise. As we touched upon in our micro home blog, this comes as a trend for more environmentally-conscious properties has increased, with properties on rural land often providing more opportunity for ensuring energy efficiency and future-proofing.
Despite a misty outlook for the UK property market in the new year so far, it’s not all doom and gloom for investors and developers. With opportunities to adapt to new technologies or snap up large, rural properties for development or British tourism, it seems the market remains somewhat resilient for those willing or able to take the risk.
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