The Royal Institution of Chartered Surveyors (RICS) has this week reported that it expects house prices to stagnate in the New Year as a mixture of affordability constraints and the ongoing agonising over Brexit continues.
RICS also predicts that the overall number of house sales will fall by 5% to a total of 1.15 million over the course of 2019, leaving the total well below the 2006 high of 1.7 million sales.
However, those headline predictions and statistics do not tell the whole story, and indeed it can be argued that they give a wholly unrepresentative impression. A deeper dive into the specifics shows a different picture.
Directly after saying that price rises will come to a standstill overall, the RICS report states that there is “solid momentum” behind ongoing price rises in several regions including the North West. This would fit with the current upward trends outside the capital and emphasises why so many investors have been fleeing London for greener pastures elsewhere. We expect this to carry on in 2019.
RICS also pours cold water on the idea of a house price crash – something which has been featured breathlessly in the news in recent months but still seems rather unlikely. It notes that the government is almost certainly going to miss its house building target, an eventuality which is not a shock to anyone who has been paying attention, and that this inevitability will continue to bolster prices.
The fact is that the number of people trying to get on the housing ladder keeps growing and the housing stock can’t keep up. Combined with schemes like Help to Buy which increase demand whilst doing nothing to address supply, it is hard to see what changes. In this scenario house prices will grow, as will the number of people who will have to continue renting permanently. In turn, this will push rental yields upwards.
Overall it is hard to see why investors and homeowners should not be positive heading into 2019. The latest State of the Property Nation report from Zoopla confirms that Britons are, on the whole, looking forward to property market in 2019. A full 55% of people surveyed expect house prices to rise in the next 12 to 18 months. This represents a rise of more than 10% since 2016 which is quite incredible when you consider all the uncertainty which has been unleashed since then.
Statistics like this make it clear that property is not only set to continue on an upwards trajectory in the new year, but that the impression of the sector as a safe haven in harder times is only becoming more set in stone as we go. It is a good time to invest in UK buy to let property!
If you would like more information about investing with Knight Knox please click here. We hope you all enjoy the festive season and have a wonderful new year!