The rise in house prices will come to a standstill next year amid Brexit uncertainty and stretched affordability, predicting brokers
- British house prices fall slightly in London and the southeast in 2019
- But Northern Ireland, North West, Wales and Scotland see & # 39; solid & # 39; growth
- BoE & # 39; s worst scenario of 30% fall in house prices is & # 39; unlikely & # 39 ;, says RICS
- The British economy will slow down next year due to a freeze on business investment and weak consumer demand for Brexit, says BCC
Camilla Canocchi for Thisismoney.co.uk
House prices in the UK will stagnate next year and house sales will fall further because the uncertainty of Brexit and high prices keep more potential buyers and sellers away from the property market, inspectors said.
The Royal Institution of Chartered Surveyors said that affordability aside – which still excludes many people from the market and it is unlikely that they will improve next year – political uncertainty seems to lead to hesitancy among buyers.
However, it also said that the Bank of England forecasts that housing prices would fall by 30 per cent after a disordered Brexit, & # 39; unbelievable & # 39; would be.
Delay on the housing market: but according to RICS, a Brexit without a deal would not cause a 30% drop in price
In the first place, we would expect the bank to lower interest rates and possibly restart quantitative easing in the wake of a no-deal. The analysis behind the 30 percent decline in house prices assumes that the policy rate would be increased to 5.5 percent, & # 39; said RICS.
Nevertheless, a negative shock to the economy as a result of a no-deal outcome expected by the majority of economic forecasters would affect income and reduce housing demand. & # 39;
The RICS predictions are that the British Chamber of Commerce said the entire UK economy will slow down next year as a result of freezing business investment and weak consumer demand for Brexit.
The company lobby said growth would probably slow to 1.2 percent this year before it would rise to 1.3 percent in 2019, which would be the two years with the weakest growth since the 2009 recession.
Although Brexit is not the only factor that affects companies and commerce, it is extremely important – and the lack of certainty about the future relationship of the UK with the EU has led many companies to take the break. button on their growth plans have hit & # 39 ;, BCC director Adam Marshall said.
Zero growth: RICS expects house prices to stagnate next year
RICS said that leaving the EU with a deal is the most likely outcome & # 39; used to be.
But even in this scenario, it expects the number of houses sold to be about 5 percent next year to 1.15 million.
This is because a projected gradual rise in interest rates would drive up mortgage interest rates, which in turn would weigh on demand • to some extent & # 39 ;.
RICS also predicts that prices will be flat from mid-next year, but said that the image is significantly & # 39; varies in different parts of the UK.
It is expected that house prices in London and the southeast will attract somewhat & # 39 ;, mainly because the affordability in this region is overburdened, but they will be with a solid & # 39; speed continues to rise in Northern Ireland, the North West of England, Wales and Scotland.
East Anglia and the South West are not expected to see price growth next year, RICS said.
"Further growth in some regions is likely to offset a negative trend in others, while a generally stable picture appears to be the most likely outcome for the remaining areas," the survey said.
& # 39; This leads us to expect that national averages for prices will be relatively flat by the end of 2019. & # 39;
Stretched affordability: the ONS estimates that house prices are now a greater multiple of income than at any other point since the start of the records
It is because several surveys consistently point to a slowdown in the housing market, the latter by Rightmove suggesting that average demand prices in December had dropped by £ 10,000 in just two months.
RICS said that affordability may have been the main reason for a slowdown in the market, indicating official data indicating that the average buyer for the first time needs an average down payment of £ 33,000 – 71 percent higher than ten years ago.
& # 39; Such high house prices are closing more and more people access to the market and forcing others to save longer for a down payment, & # 39; it said.
& # 39; Even for those who theoretically could afford to buy, current prices may still be unpleasant. Unfortunately, next year there is little reason to anticipate a material improvement in affordability. & # 39;