The British property sector faced major headwinds this summer amid Brexit uncertainty, but still managed to keep its calm and carry on despite the doom-mongers' predictions.
Average house prices only grew 3.2% nationally in the year to September 2018, way down from the boom times when 5% growth was the norm, the Office for National Statistics reported. No surprises there as Brexit jitters made buyers worried about forking out.
London was hit hardest over summer, with actual price drops of 0.2% annually. Ouch! The South East, meanwhile, kept calm and carried on thanks to its prime commuter belt location, seeing steady gains of 2.8%. Hotspots like Reading, Winchester and Oxford saw bubbly growth.
Two main factors knocked the stuffing out of the market this summer:
- Brexit Fears: Caution went sky-high among buyers as Brexit confusion continued, making peeps reluctant to make big financial decisions.
- Mortgage Hikes: Average 2-year fixed mortgage rates rose to 2.52% by September, up from 2.28% a year earlier. This made it tougher for buyers to afford their dream homes.
It wasn't just Brexit and money matters causing a stir this summer. The government made some big rule changes that impacted landlords and renters:
- July saw a ban on tenant fees in England, reducing move-in costs but putting more pressure on landlords.
- Stricter licensing for multi-occupancy Houses in Multiple Occupation (HMOs) also kicked in. Landlords with larger HMOs faced new responsibilities.
- Tighter mortgage affordability rules for landlords buying buy-to-let properties came into play in September.
- Renter rights campaigns against 'no fault' Section 21 evictions ramped up over summer, foreshadowing future reforms.
On the bright side, buyer demand and mortgage approvals didn’t fall off a cliff. But get this - the number of sellers also declined, squeezing supply. No bueno.
The bottom line? The property market took a few punches this summer but didn’t throw in the towel. However, with more regulation and Brexit uncertainty, it needs to be ready for further knocks. Keep calm and carry on buying folks!
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