The UK property market was hit by the January blues as Brexit uncertainty continued to drag down house prices and sales to start 2019.
Nationally, average house prices fell 0.8% month-on-month according to the Land Registry's provisional January figures. This marked a weak start to the year as political chaos sapped buyer confidence. In London, the drops were even steeper, with prices plunging 2.2% from December as the high-end market remained stuck in the doldrums.
The South East held up better than the rest of the country, with prices staying flat from December. However, Rightmove reported that an increasing share of sellers were cutting asking prices to attract wary buyers and keep sales moving.
Up in the North East, prices actually rose 1.1% month-on-month, bucking the downward trend seen nationally. But momentum was fading in the region, with annual growth slowing to just 0.8% in January from stronger levels previously.
In Essex, average values held steady compared to December 2018. However, actual sales volumes took a significant hit, with transactions down 14% annually according to HMRC's latest data. Ongoing Brexit indecision continued to weigh heavily on buyer demand and confidence.
This weak start to the year showed that the ongoing lack of clarity around Brexit was still inflicting damage on the property market. Surveyors predicted further price falls nationally after Theresa May's withdrawal deal was resoundingly rejected in parliament in mid-January. With the March 29th Brexit deadline fast approaching, buyers remained in wait-and-see mode.
Amid the doom and gloom, there were some bright spots in January:
- Mortgage rates continued falling slightly, with average 2-year fixed deals hitting 2.52% to improve affordability for buyers.
- The Tenant Fees Act officially came into force across England, delivering a major win for renters by banning most letting fees.
In summary, the property market looked set for a bumpy ride in the first half of 2019 until some form of Brexit resolution could be found. But lower mortgage rates and the new policy changes offered some positives amid the ongoing uncertainty. Here's hoping optimism returns soon!
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