As we reach the end of February, the UK property sector continues lacking momentum despite a post-election uplift in sentiment.
Nationally, house prices rose 0.3% month-on-month in January with early indications they held steady in February. But the traditional new year bounce in activity has so far failed to materialize.
In London, values dropped another 1% in January as high-end homes remained out of favor. By contrast, the Midlands registered robust 6% annual growth driven by its relative affordability.
Here in Essex, prices nudged up 0.2% in January but sales volumes were down 6% annually as first-time buyers stayed cautious. Mortgage rates remain competitive but high deposits pose a challenge.
The buy-to-let market also continues to face headwinds, with rents growing only marginally amid tighter tax rules for landlords. Investor appetite seems muted despite decent yields.
While the election result brought some reassurance, confidence still remains fragile in the underlying economy. Global headwinds around coronavirus also loom as a potential threat.
Economists hope Chancellor Rishi Sunak's upcoming March budget provides a stimulus like stamp duty reform. But a real market revival may depend on stronger wage growth to improve affordability.
As we enter March, the property sector is still awaiting signs of a meaningful upturn. While a no-deal Brexit has been avoided, the bounce back in activity many hoped for has yet to emerge in 2020 so far.
Let's see if spring brings renewed optimism and appetite from house buyers. For now, it appears the housing market slumber continues.
Comments