We take a look at what the powers that be are saying about the housing market, mortgages and the market in 2019.
What grand expectations, coming to this blog, you would have. We are not fortune tellers and we don’t really know what will happen in the future. But we did read a report that is making some well informed predictions…
Firstly let Coleshill Mortgage Services say a Happy New Year and we all sincerely hope that you have had a cracking Christmas, or festive period. Ok, that’s the pleasantries out the way, it is unfortunately, time to get down to business. That business is the housing market and the current predictions from online news sources.
So is it it good news. Well unfortunately not.
RICS – which is the Royal Institute of Chartered Surveyors, released a report in December regarding what they feel number of sales will be in 2019 and how sales will change within different locations. Firstly the biggest point is the number sales of houses across the UK. Now obviously these are all predictions and told in a lot more detail in the report (link to it at the bottom of the blog). RICS reported that in 2019 they felt that the number of sales will fall by 3% to 1.19 million, thats from 1.22 million in 2018. And a much bigger fall from the 1.7 million in 2006.
This can have a lot of affects over the market. We have mentioned quite a few times how sales is really what drives, well any market but particularly the housing market. When it comes down to it there is only a limited amount of houses (though we will talk about that later), so if houses are not being sold, then people are not moving into houses and property is either not exchanging, or in the case of new builds going into peoples hands.
So what affect will a drop in sales have? Remember these are all predictions. Not set in stone.
Find the full report here
((You are now departing from the regulatory website, neither Coleshill Mortgage Services or Quilter Group are responsible for the accuracy for the linked site).
What is the first thing that happens if sales slow down. What happens is prices go down. It’s simple supply and demand. If the supply is higher than the demand then prices always remain low. This is not always a bad thing. In previous blogs we have spoke about the affordability of housing for young couples. So prices of houses becoming more affordable maybe what the market needs. Though the RICS report thinks not.
Last year the government removed the cap for local authorities in their ability to lend for the building of new houses. New houses in the market gives young couples and first time buyers the opportunity to have options to buy houses. There is also the “help to buy” scheme which will also assist people in the purchase of new builds.
With more demand on rents (as there are less sales) and therefore less availability, there will most likely be a little nudge on rents throughout the country.
So nothing positive?
Well we have tried to place a positive spin on things but with a market that often the sellers of a product are also its consumers it is always hard to please everyone. With wages, though getting better but not keeping with inflation, it means no matter what happens, someone loses out. If house prices go down, first time buyers and younger couples and families will be able to afford those houses. But it means that people who own the houses main lose equity in the house and not be able to move on in the market.
It really is a tough one. But the future is not written and things may change. We have Brexit to weather yet!