Sales

From RICS to Rightmove, housing market analysts are positioning themselves with low expectations, especially for the first three months of 2019. The overall sales activity including the transaction volumes will weaken further, they suggest, as the first quarter of this year is likely to be relatively quiet and uneventful with most of vendors pausing with sales until end of March 2019. 

RICS’s Housing Forecast 2019 suggests that the national house price growth will come to a halt as the growth of new builds has slowed and the number of agreed sales has dropped. "It is evident from the feedback to the latest RICS survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market," said Rics’ chief economist, Simon Rubinsohn.

Looking ahead, it is unlikely that sales will grow in 2019. In the past two years, sales activity has declined, and annual completed transactions remain significantly below the 1.7million high reached in 2006. Given the obstacles in the current market it is anticipated that activity will weaken further.

Miles Shipside, Rightmove director and housing market analyst, says: “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. Positive employment data and affordable mortgage interest rates at high loan-to-value ratios are key to keeping property prices broadly in line with current levels.

Homes & Property and the property expert Henry Prior note that aware of the growing unease, buyers will be holding out for big price reductions. "Death, divorce and debt will drive supply but buyers will only commit for a significant bargain,” says buying agent Henry Pryor.

Falling house prices, however, could attract more wealthy foreign buyers looking for a bargain opportunity.  It has been reported that sales of houses worth over £10mil ( the ultra-prime market) tripled after sterling slumped following Brexit vote. Approx. 300 homes have been sold for more than £10m each in the tax year to April 2017 – compared to only 100 sold at that price in the preceding 12 months. London properties are likely to profit as our city attracts most of high-net-worth individuals and property investors from all over the globe.

Construction

  
In the Private Housing Construction Price Index (PHCPI) the RICS warns about the fact that the UK housebuilders' costs rose 3.9% in the year to 3Q 2018. In the latest quarter, 62% of contributors to the survey reported increases in costs. Of those that indicated a cause, 20% cited labour costs had risen, 50% reported materials cost increases and 30% reported increases in both labour and materials.

Lettings market  

According to the ONS stats released on 19 December ’18, London private rental prices were unchanged (0.0%) in the 12 months to November 2018; up from a decrease of 0.2% in October 2018. Focusing on the long-term trend, between January 2015 and November 2018, private rental prices in the UK increased by 6.8% .

Lettings market is still driven by demand over striping the supply which in turn may push rents up. Therefore, the rental growth could accelerate slightly in 2019.

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