2018 was not without its challenges for property developers thanks to falling GDVs and the shadow of the uncertainty of Brexit looming over the UK property market. As 2019 begins, we take a look at some of the biggest trends set to face the UK housing market this year.
There will be more people looking to buy property
As the date that the UK is set to leave the EU has grown closer, buyer activity has slowed down considerably. However, it is thought that the build-up of demand might come to a head once the outcome of Brexit is clear, leading to an upturn in the number of house sales post April 2019.
Nationwide’s chief economist, Robert Gardner, cites the rise of employment rates, less squeeze on household incomes and only a modest increase on interest rates, as just some of the potential contributing factors to increased buyer activity in the housing sector next year. (1)
Lack of supply will continue to support house prices
House prices are expected to continue to rise in 2019, with the rate of growth starting to pick up towards the end of the year. Although the current rate of growth is slower than pre-Brexit rates in 2016, a lack of supply and increased demand is expected to start pushing prices back up towards the end of next year.
Most growth expected in the regional markets
2018 proved that regional markets were the best at being able to withstand the uncertainty of Brexit and this looks set to continue in 2019. The north of England has seen the biggest rise in housing prices recently, with Manchester showing the highest rate of growth in five of the last six years. Savills also forecast that property values in the north-west will increase by 21.6% over the next five years, closing the gap between comparable property prices in London and the South East.
New technology to transform the property market
A number of different fields in the housing sectors are coming to embrace new technologies being developed in the property sector – ‘proptech’. Increasing economic pressures have led to estate agents, conveyancers and planners increasingly adopting proptech to help them improve the building and homebuying process.
More opportunities for new developments
One of the biggest challenges for the UK property market in 2018 was the difference between land values and falling GDV. This led to a narrowing in the profit margins for developers and an increased competition for sites where the margins are still viable. The latter part of 2018 saw land owners start to adjust their prices in line with market expectations. If this trend continues through 219 as expected, then there will be more opportunities for new developments.