What 2019 has in store for the property sector

Property News February 1st, 2019
What 2019 has in store for the property sector

Brexit

The biggest factor in the property market that everyone will be looking at is of course Brexit, which casts an uncertain shadow over the whole of the British economy, and what happens to the housing market will very much depend on what kind of deal is agreed between the UK and Europe.

The uncertainty has already affected house prices, which fell on average at the quickest rate in 6 years.

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London is one of the regions most affected by the uncertainty, seeing a fall of 1.2%.

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Other have been less affected by the uncertainty, and places like the Midlands, the North-West and Wales have seen house-prices grow.


In non-Brexit news

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The passage of the government’s Tenant Fees Bill will have an impact on the market, as landlords burdened with more costs may consider selling.

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Such a move will lessen a supply that is already outstripped by demand, and a recent study by Rightmove showed that there is a steep decline in available properties to rent.

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The Tenant Fees bill could have the opposite effect it was intending and hinder both landlords and tenants and create higher costs of rent rather than helping to lower them.

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Mayor Sadiq Khan has also announced that controlling rent will be the main platform of his re-election bid, which adds to the squeeze on landlords,

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Although unless he can garner support from the government, it is unlikely to go far. The Housing Minister James Brokenshire has already highlighted the potential downfalls of Mayor Khan’s plans, by describing how capped costs could reduce housing standards, and adding to the danger of further reducing supply of rented accommodation if landlords leave the market.

Reasons to be optimistic

There are several regeneration projects going on:

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Lambeth has created a range of affordable accommodation options and is very central.

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Areas such as Waterloo, Clapham and Battersea are also becoming particularly popular and offer good investment opportunities.

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In North-West London, Cricklewood and Brent Cross are investing billions in renovating the area, creating thousands of new homes.  The Brent Cross shopping centre is also going to grow considerably to cater to the growth in housing, which will increase its attractiveness.  Closer to the centre of London, Farringdon is being converted from a commercial district into a residential hotspot. If you are managing a HMO as a housing association or co-operative, a council, a health service or a police or fire authority, then you will not require a license for your HMO.


Countrywide housing market growth

Outside London there is good news when it comes to property.

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The commuter belt is growing in desirability, and this goes beyond outer London thanks to projects like HS2, which will better connect areas like the Midlands, connecting Birmingham with London within 50 minutes.

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Birmingham is going to be one of the biggest beneficiaries of HS2, and its internal connections also mean more people in the city will be able to take advantage of HS2, increasing its attractiveness as a city to live.

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Manchester is also seeing property market growth above the national average, new developments like Salford Quays and the new tram link is making Manchester more desirable.

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With a growing economy and a thriving student population, it has become a hotspot for property investment.

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Rental yields are 8% higher than London, and demand for housing already outstrips supply, which is good news for investors and property managers.

Conclusion

Despite the uncertainty there is considerable growth in the house prices, and several regions have seen the average value of house prices rise and begin to catchup with London.  While Brexit is a big issue affecting house prices, there are other issues behind the falls, such as a lack of affordability in London and the South-East.  The key factors behind the housing market growth are affordability, and where economic opportunity is growing.  As for London and the South East, markets hate uncertainty, and the housing market is no different, and until there is some semblance of certainty, a significant increase in prices cannot be expected. There is unlikely to be any certainty in first 3 months of 2019.


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