Experts have long been questioning just how long the London house price boom could continue, and it now looks like the end could be in sight. Far from this being bad news for the UK, house prices are actually set to continue to rise by 2%. But you’d have to look to the north of the country to find the source of this increase. Northern regions are outperforming other areas in the UK.
The election result has given us a majority parliament, which brings some stability. With a majority parliament, movement on Brexit is looking more likely. This is all adding up to an acceleration of the market, with places like Manchester and Newcastle driving this trend.
Pent up demand
With the Brexit uncertainty came a lot of market uncertainty. But with a new government comes more certainty. Home owners may have been reluctant to shift their properties while the pound was weakened. And prospective buyers were also discouraged by the weakened economy and were reluctant to make any big purchases, leading to a slump in demand. The renewed confidence in the Brexit outcome could lead to a sharp increase in supply, while buyers are keen to work out their pent up demand for a new property.
Big sales leading the way
As if to cut the ribbon on the UK house market post-election, one super-rich family on London purchased a £65 million home in central London. They had drawn up the paperwork earlier in the week but waited until the outcome of the election was finalised before signing on the dotted line.
Not great news for everyone
While those with the means to make quick financial moves will benefit from the political certainty, it might not trickle down to those looking at the lower end of the market. A slow market can be good news for those looking to negotiate on price, but for those who might struggle to secure a larger deposit, the slow market could be bad news.
In general, mortgage providers are reluctant to lend to higher risk borrowers. And with the Help to Buy ISA deadline having passed in November, this could make it more difficult for first time buyers to make a move. According to Niche Mortgage Info, freelancers and the self employed will have the hardest time convincing lenders to take a chance on them.
Where to look for property
If you are in a position to buy, there are a few regions where you can still snap up a bargain. These areas are all experiencing huge growth which doesn’t look set to slow down any time soon.
If you want to get on the property ladder, look outside of London to places like North Devon where the average house price is £255,330 and there has been an annual increase of 7.6%. You could also head north to Salford, where the average house price is £170,904 and has increased by 6.7% in the past year. And if you want to look even further north, the average house price in Newcastle is £171,374 and increasing by 6.7% per year.
Looking at the increases over the past 5 years, the Northwest has seen some of the biggest price hikes. House prices in the region have shot up by 24%, followed closely by Yorkshire which has seen increases of 21.6% in the past 5 years.
With Brexit uncertainty out of the way, the UK property market is looking more confident, vibrant and ready to move. The final outcome of the EU negotiations will be the next stepping stone for buyers and sellers to overcome. Could a No Deal Brexit lead to a slump or a surge? Only time will tell.