My predictions for the property market in 2019
Brexit looms large over the property market in 2019 as it does over much of our lives. Who could have foreseen in 2016 that we would witness such levels of utter incompetence on the part of the political classes and Whitehall Mandarins as we have seen in recent months. Uncertainty over the outcome of the Brexit negotiations has certainly caused some buyers and sellers to hold back and the longer this farce continues, the more damage will be done. We can only hope that there is a resolution in the spring and the country can move forward.
The governor of the Bank of England has predicted a 30% fall in property prices should we leave the EU without a deal. However, I don’t agree with Mark Carney’s dire forecast firstly because he is firmly in the project fear camp and secondly because Parliament has no intention of allowing a no deal Brexit. It is fair to say, however, that we have come to the end of the latest cycle in house prices and house price inflation will be flat for a year or two. Whilst our population grows at such a fantastic rate and whilst the vast majority of people in the UK have a job it is very hard to see how property prices can fall very much at all.
Interest rates will rise in 2019 but only by minute and gradual increments. Mortgage lending will continue to be strong but this is all about households refinancing and not at all about households moving on.
In recent years we have become a nation of improvers rather than a nation of movers. When I started my business in 2004 people moved house on average every 7 years whereas today we move house on average every 17 years. This remarkable change in behaviour is due in part to the high levels of property tax levied on each purchase, making it more cost effective to stay put and extend homes rather than move on up the property ladder. This trend is likely to continue in 2019.
Buy to let as an investment model will continue to fall away as the preferred get rich quick scheme for the middle classes. Changes in stamp duty and mortgage interest relief have increasingly taken the gloss off buy to let and 2019 will see this trend continue. We will see more, smaller landlords bailing out of this sector in 2019 whilst bigger players and those holding properties within limited companies may continue to make it work.
The good news for the property market locally in 2019 is that Norwich remains an extremely popular destination for buyers seeking career progression or a change in lifestyle. So if you have a property to sell there is no reason why you shouldn’t achieve a great outcome in the New Year.