Did someone say the B word?
With the first blog of the year it seems appropriate to start with the dangerous topic of Brexit and consider whether is it the right time to buy a house, or is it wise to wait until after we exit the EU? With a new year comes renewed hope that our politicians from all sides might be able to sort out this mess and leave us with some certainty as to what we’ll be faced with in 2019… well that’s the hope anyway!
Back in September, comments made by the Governor of the Bank of the England, Mark Carney, hit the headlines when he suggested that house prices could fall by 35% over three years following Brexit. Looking beyond the headlines, this was a worst-case scenario, with the figures having been produced during a stress-test exercise, carried out to assess the resilience of financial institutions in the most extreme situation. Of course the media latched onto this figure and much like the big red bus with the promise of additional funding for the NHS it caught the attention of the nation.
The current situation
Despite widespread uncertainty, the public remains surprisingly confident, with 30% thinking that house prices will increase, 28% expecting a plateau and only 4% saying that prices will fall after Brexit. In the year to June there was a drop in house prices in London, but an increase of over 3% on average overall. As many will know, the London market will always be the first to react both negatively and positively with the swings in prices being far greater than in other areas of the country. This should not be a yard stick with which to measure the UK housing market as a whole.
More recently, estate agency Rightmove has seen a fall in asking prices, with an average drop of £5,000 in November of this year and an increase in time taken to find a buyer from 56 to 61 days. In my view this is merely a correction in the market and will be seen as others as an opportunity to buy, keeping house prices stable throughout the year, with most predicting an increase of between 3-5% annually across the UK.
Should you buy?
It seems likely that the market will continue to slow as buyers decide to wait and see and this seems like a sensible approach at present. If you do decide to buy, it should be a long-term decision if possible, to a property you can envisage staying at for at least 5 years. This will give the market time to stabilise and will ensure that any fluctuations in the market will iron out over that time.
With properties becoming more attractive as prices are lowered opportunities will become available for those who are ready, willing and able to purchase. New build homes will become more attractive with developers offering better incentives to purchase and the government help to buy scheme still very much being in full force.
The question is yours to answer, however it is my view that the market remains stable and will continue to do so throughout the year. You should ensure however that when you instruct your conveyancing lawyer you instruct one that not only understands the law but also understands the market place and how to get the deal done. At evolve law we pride ourselves on not only knowing the law but understanding our clients and their needs. We insist on working with other firms, agents and other third parties to ensure matters reach the point of completion with minimal fuss and without legal jargon for the benefit of our clients.
Call us on 01908 018390 or email us at firstname.lastname@example.org if you want to hear more or for a no obligation estimate of costs for your transaction.