Some fresh signs of life have been springing up in the housing market.
The average UK house price jumped by just over £4,000 between November and December last year, according to Halifax. And some property websites have reported seeing a boost in activity last month, compared with the previous December – indicating more people are considering moving in the near future.
Experts, however, warn Brexit-related uncertainties will inject a dose of caution into the housing market as the year progresses, with the UK now set to officially leave the EU on Friday.
Andrew Montlake, managing director of broker Coreco, says: “The first half of the year may see more activity than the second, as the complexity of the trade negotiations ahead becomes clearer.”
Here’s a look at the trends and expert predictions, which could provide some clues about what’s around the corner.
Analysts believe house-price growth could land somewhere around the 2% mark this year.
Yorkshire Building Society thinks house prices could increase by 0-2%, the Royal Institution of Chartered Surveyors expects a 2% average increase, and Rightmove also predicts sellers’ asking prices will increase by 2%. Meanwhile, Halifax expects house price inflation of 1-3%.
Economists have suggested last month’s General Election result has brought short-term certainty to the market. Property website Rightmove says it saw demand across the UK from prospective buyers increased by 28% in the four days after the election.
Home buyers who fancy city living could face forking out more. Property website Zoopla says it expects city house prices to increase by 3%. In cities which are currently more affordable, house prices may increase by 4% by the end of 2020, it forecasts. Zoopla says the average UK city house price has already increased by around £90,000 over the past decade, equating to a 4.4% average annual increase.
The Royal Institution of Chartered Surveyors predicts rents will increase by 2.5% as the sector continues to struggle with a lack of supply, compared with house price growth of around 2%.
David Cox, chief executive of letting agents’ body Arla Propertymark, says more than four-fifths of companies expect rental prices to increase, up from 65% when agents were asked the same question a year ago.
Meanwhile, the number of first-time buyers is going up. According to estimates from Yorkshire Building Society, there were more first-time buyers across the UK in 2019 than in any other year since 2007. More than 353,400 took their first step on the property ladder last year.
Nearly twice as many first-time buyers secured a mortgage in 2019 compared to the start of the financial crisis in 2008. Those entering the property market now account for more than half (51%) of homes purchased with a mortgage.
So, will the growth in first-time buyers continue? Low mortgage rates and low deposit mortgages should continue to help the sector in 2020.
Lesley McPherson, from the Co-operative Bank, says: “Buying a first home is still a key priority for many people and if interest rates remain low through 2020 it would be good news for first-time buyers.”