Industry Roundup – April 2019
London property industry roundup – Price growth slowdown spreads
UK city house price inflation has slowed to 1.7%, the weakest growth since May 2012. Originating in London, growth has stagnated amidst affordability pressure and increasing moving costs. Demand is also weaker in certain southern cities, with sales down by 20% in London and Cambridge while Portsmouth and Bournemouth are down by 12% and 13% respectively.
This decline can be largely attributed to high price growth since the recession having a direct effect on sales. Falling sales after a period of high house price growth is a standard reaction in the housing cycle as buyers are priced out of the market.
Above average price growth in affordable cities
Cities with the highest price growth right now are the more regional cores such as Liverpool, Leicester and Glasgow. Similarly, housing sales in Glasgow and Liverpool are up by 12% and 19% respectively.
Housing cycle marches on
Despite the uncertainty of Brexit, the housing cycle has continued to unfold as normal. Falling mortgage rates have boosted buying power, while growth in house prices over the last 10 years has been driven by rising employment. Prices in some cities have also received a boost from investor and overseas demand.
These higher prices have impacted the demand for housing while changes to tax and mortgage regulations have shifted affordability fundamentals. Slower house price growth is expected for most cities as they adjust to these new dynamics.
Property Industry Roundup
Mortgage affordability remains stable outside of the capital
National mortgage affordability has remained steady according to a study from Halifax, although the picture is bleaker for those wanting to buy in London. According to Halifax research, affordability levels have improved nationally over the last ten years – in 2008 a typical mortgage payment accounted for 39% of a homeowners disposable income while today it’s 28.8%.
Rightmove believe in Brexit bounceback
According to Rightmove, the UK property market is set to experience a ‘Brexit Relief Rally’ over the summer, as prices on the leading website jump by an average of 1.1% over the last month. With the delay of Brexit formalised, confidence is likely to return to the market and while there are ‘twists and turns’ to come, Rightmove anticipate a wave of relief that releases pent-up demand.