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What will the property market look like in 2019?
Welcome to our first newsletter of 2019! In this January edition, we take a look at how the property market will look in 2019 and analyse the effect that Brexit could have on property prices.
If you're in need of reinvigorating your kitchen this New Year, we've several top tips to help and reveal why it can take as little as eight minutes for potential buyers to decide on a property.
What will the property market look like in 2019?
2018 has been a year of ups and downs in the property market, with the overriding factor being the imminent break from Europe. As we move into 2019 and March 29th (the official date of Brexit), there remains a certain level of uncertainty in the market. However, this should be tempered with cautious optimism when looking at the gains that property could make in the post-Brexit period.
Interest rate uncertainty
Something which is currently subject to extreme uncertainty throughout 2019 is interest rates, with the Bank of England having already increased rates last year for only the second time in over a decade. On the one hand, Mark Carney, governor of the Bank of England, has indicated that the Monetary Policy Committee (MPC) will continue to gradually increase the base rate next year. However, Carney has tempered this intended rise in base rates by stipulating that in the event of a disorderly Brexit the MPC would be prepared to similarly cut rates in order to support the economy.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “It looks set to be an intriguing year. We expect interest rates to end the year around 1% and mortgage rates will reflect this.”
Competitive mortgage market
During the course of 2018, the competition in the mortgage market has become rife with more offers available and more options to entice buyers into the market than ever before. Looking to 2019, there is no indication that this competition between lenders will subside, making mortgages more accessible to a wider market. Currently, there are 1,459 cashback incentives available on residential mortgages which is nearly two-and-a-half times more on offer than in 2011, according to Moneyfacts.
David Hollingworth, of L&C Mortgages, offered: “This year has been very, very competitive with mortgage lenders pushing hard to attract borrowers. I don’t see a reason why that would change in the new year and it might just be a tighter market with even more intense competition.”
First-time buyers
2018 saw an unprecedented number of first-time buyer transactions in the property market, with numbers reaching an 11-year high. With the news from the Budget that the Help to Buy scheme will be extended a further two years, many potential purchasers should also join the property market in 2019. Often, saving for a deposit is the chief hurdle for those wanting to buy a home; however, with the availability of deals for people borrowing 95% of their home’s value soaring to 304 different mortgage options, this hurdle is now being circumvented by the mortgage industry. With more mortgages with lesser deposits available, as well as shared ownership and purchase schemes offered, we should see first-time buyers once again on the rise throughout the course of the new year.
Remortgaging
With lenders in stiff competition with one another and low-interest rates still present, many agree that 2018 has been a good year to remortgage and 2019 will continue to offer favourable conditions for those looking to capitalise.
Rachel Springall, finance expert at Moneyfacts, says: “Throughout 2018 the mortgage market has had to absorb the base rate rise back in August, which has inevitably pushed the average standard variable rate to its highest level in almost ten years. This has meant the incentive to remortgage has probably never been greater.”
Five top tips to reinvigorate your kitchen this January
Whilst the living room is usually considered ‘the heart of any home’ in most UK households, the kitchen plays a much more central role in day-to-day family life. Follow these simple guidelines to achieve kitchen bliss!
Make the most of your space
Finding suitable storage units to house all of your pots and pans can be tricky - especially if you are working with a particularly small kitchen. Utensils, appliances, and accessories can certainly clutter up your worktops. Either tuck these items away in cabinets or display them in open shelving to add a decorative and homely feel.
If you are renovating your kitchen from scratch, choose cabinets that have pull-out baskets and drawers for maximum storage space. A recent trend for kitchen redesigns is to contrast worktop colours or textures and to change traditional handles for stylised ones. Although this look is popular right now, that may change by next year, and counters can be costly to modify. Finding a balance between trendy and timeless ensures that your kitchen never seems dated.
Go bold
Even if you’re not renovating your kitchen, there is no rule to say that you’re stuck with your old counters or the ones that a previous owner left behind. Sand and paint the counters yourself, and save having to buy and fit out a completely new kitchen every time you redecorate.
Whilst patterned tiles can make bold statements, don’t overwhelm your kitchen by tiling it from floor to ceiling. When going for bold, try to keep it simple. That may seem contradictory, but having too many bold prints, colours, or patterns in one room will make your kitchen look messy. Tie your room together with colour gradients and make complex patterns look a little subtler.
Lights, candles, atmosphere
Everyone appreciates privacy in their own homes, but rather than choosing to hang heavy curtains, look instead towards using a lighter fabric or blind to highlight any natural light in your kitchen. Likewise, a lighter colour will emphasise the openness of your window whereas a darker material may make the room seem much gloomier.
For the areas of your kitchen where natural light does not reach, put lamps or candles into position for ambience during the evenings. Spotlights or ‘downlights’ attached to the bottom of your cabinets are also an affordable way to improve lighting in your kitchen. These additions will make your room seem bigger, more open, and yet more intimate.
Opt for quirky and personal
Don’t be afraid to style your kitchen according to your own specific tastes, no matter how quirky they may be! By all means, consider hiding your knick-knacks when your property is on the market - as this will encourage potential buyers to envision buying your property - but whilst you are living there, live there! Whether you are a minimalist or a hoarder, showcase your treasures and memories for all to see.
Plants here, there, and everywhere
Having potted plants or herbs in your kitchen will give the room a healthy and natural look. Plant pots can be bought from a wide range of suppliers and you can even paint these for a different and unique finishing touch.
Your kitchen design ‘musts’ should be; appropriate use of space, maximum lighting options (both natural and artificial!) and suitable storing. Once you get these things right, they require very little attention. Unlike colour scheme and accessories, which can have a very dramatic impact and completely revitalise a room in need of some TLC.
It takes as little as eight minutes to decide on a property
As any estate agent can tell you, a successful sale hinges on a good first impression. Prospective buyers possess a sixth sense when it comes to viewing a property and if things aren’t up to scratch – inside and out – you can guarantee they will spot it.
In fact, a recent study has revealed that the average house hunter only needs eight minutes to decide if a property is for them or not and six in ten adults will also choose not to buy a property based on the condition of the exterior of the property, without even needing to view the inside.
In comparison, 18% of buyers admitted to buying the very first property they view and 15% said they decided to buy the property before they had even viewed it in person.
This decisiveness extends online, with the average buyer spending eight minutes deciding whether or not to visit a property – highlighting the importance of a good online advert.
75% also confessed to being irritated upon finding that an advert or online listing does not accurately represent a property when visiting in person.
The study also revealed which aspects of a viewing signalled an early exit for many prospective buyers. The main offender was an obvious damp patch, which 60% of buyers said would put a stop to any future transaction, whilst a house on a main road or cracks in the wall would also put an end to the viewing.
For the buyers who are good at seeking out the problematic finer details of the property, there were some decisive reasons for buyers backing out of the viewing, such as dirty toilet pipes, overflowing bins, wheelie bins left in front of the property and faded or yellowed paintwork.
Some viewers take issue with a sellers lack of preparation for the viewing such as untidy rooms, poor DIY and ashtrays left around the house.
Other reasons included logistical problems such as the size of the rooms being too small for the buyer’s furniture or issues with the natural lighting of the property. The current owner’s furniture cluttering up the layout of a room which preventing the buyer’s imagination from running wild led to over a third of buyers to back out of a purchase.
The list showcases the importance of sprucing up your home, both before putting it on the market and before every viewing. A prospective buyer needs to weigh up the additional costs and work involved in buying a property, so ensure you give your home the most generic makeover possible and organise your possessions and furniture in a way that won’t distract the prospective buyer.
Property prices in 2019 will depend heavily on the effect of Brexit
2018 was a year of ups and downs for the property market, with the emergence of some strong growth in the Midlands tempered with a stifled market in the capital city. Despite plenty of challenges, a report for lender ‘The Halifax’ points out that 2018 growth has been within its initial forecast for the year and goes on to predict broad stability for house prices in 2019. However, unsurprisingly, it stipulates that this will be dependent on the outcome of Brexit in March.
The report predicts national growth of between 2% and 4% for house prices and goes on to point out that the current shortage of homes for sale will continue to support high prices in 2019, with the result of strong market competition amongst buyers.
“The housing market in 2018 followed a similar trend to recent years. In line with our expectations, house price growth slowed whilst building activity, completed sales and mortgage approvals all remained relatively flat,” said Russell Galley, managing director of the Halifax.
“Looking ahead, aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes. Average pay growth is likely to gather pace but, with a further interest rate increase also predicted, house prices are unlikely to be pushed significantly in either direction,” he pointed out.
As the Halifax report indicates, this year should be a stable year overall for property prices in the face of Brexit. Nevertheless, there will be fluctuations throughout the next 12 months due to this exit from the EU. Property industry experts are forecasting a muted first quarter in particular, due to the build-up to the official withdrawal from the European Union on March 29 as sellers and buyers alike hold fire on their property activities. For sellers, that means hoping for a higher price later in the year and for buyers, hope for more choice.
“Brexit is already a significant influence in the housing market, particularly in London,” offers Ray Boulger, Senior Mortgage Technical Manager at John Charcol. “So, the key questions are how much is already reflected in prices and whether Brexit is better or worse than expected.”
Charcol continues to reflect upon the wider challenges facing the property marking in 2019, emphasising that “Housing is far from a perfect market as changes in demand can happen quite quickly but changes in supply take longer, especially when looking at overall supply, ie. the number of new homes built. The state of the economy, particularly employment, consumer confidence, the availability of mortgages and interest rates will also influence things.”
For the first quarter of the year, at least, Brexit will continue to dominate headlines and assert its influence upon the property market with many vendors and buyers hesitant to enter into transactions before 29th March. Once the break from the European Union takes place, however, and uncertainty subsides to some extent then global factors affecting interest rates will take precedence in the determining of property values.
With that in mind, it would be a mistake to be too insular when considering the 2019 housing market. As far as property prices are concerned, the report from the Halifax encapsulates the overall forecast – muted, yet growth still being reported despite the plethora of economic and political uncertainties which will dominate the year across all aspects of life.
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