Property market steady in January as wait for Brexit decision continues
Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:
The start to 2019 saw a continuation of many of the trends that were apparent towards the end of 2018, namely that there was still significant disaggregation between regional performance, and further nuances between price brackets in key conurbations. With values increasing slightly on a monthly basis in Wales, Scotland, the North East and East of England, and reports across our network of a busy month with buyer enquiries, we would suggest that there is plenty of steam left in the market in parts of the country, albeit that other areas are perhaps seeing some potential movers taking the ‘wait and see’ approach until there is more clarity around the current political situation.
This has led to reports of shortages of stock in some areas, as vendors who would like to move are also holding on until such time as the market in their area improves, providing a degree of insulation for values even where there are fewer buyers who are currently active. With many lenders entering the final quarter of their financial year in January, the market saw a raft of new and highly competitive rates released which added further support for the market as fixed-term product pricing fell to near-historically low levels.
Looking at our data for the month, we would suggest that the key indicators for residential purchase and remortgage borrowing remained, for the most part, steady in January with the only movement being a slight increase in the average value of properties which were remortgaged. Some changes were found in the Buy To Let and First Time Buyer sectors, where the average purchase price for both demographics reduced, as did the average Buy To Let purchase loan size, however even these movements were marginal rather than significant. One might suggest that this could be due to the decrease in demand for Buy To Let properties due to the impact of Section 24, which has reduced pressure on the entry level of the market, meaning that First Time Buyers in some regions of the country are no longer having to compete with landlords to purchase the same properties.
Overall, it would seem that pent-up demand is building in many areas, due to the number of well-intentioned buyers and sellers who had hoped that the political uncertainty would have abated by now. Therefore, whilst market sentiment may be one of caution in some areas for the short-term, the mid to longer-term view could well be more optimistic once we have a Brexit denouement."
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