UK Property Market Is One Of Three Countries To Shrink In 2018
The UK is amongst two other affluent countries who have endured a property market decline in 2018, according to new figures.
The MSCI Global Annual Property Index revealed that the size of the UK Market in 2018 was $714bn (£570bn), which is $6.2bn down from 2017.
Out of the top 10 countries who were researched over their market size from 2017-18, Australia and Canada were the only other two nations who suffered property market shrinkage.
The US remained the largest market, accounting for more than a third of the global total at $3.1trn, up $172.1bn on 2017. Japan remained in second place at $831bn and the UK was third.
With the decline in UK Construction as it slumps to its lowest output for more than a decade last month, and buyer market confidence slowed due to political and economic uncertainty, professionals are cautiously optimistic about the property market as a whole.
However, this month Boris Johnson planned to stimulate the property market by cutting stamp duty.
Johnson outlined his plans for an emergency budget which would significantly reduce stamp duty in an attempt to save an uncertain UK property market.
This month, HM Land Registry revealed their May 2019 UK House Price Index. Data showed average house prices increased by 0.1% month on month in May and by 1.2% year on year, which makes the average property in the UK valued at £229,431.
The published Office for National Statistics (ONS) shows that prices increased by 0.1% month on month and by 1% on an annual basis to £245,817, but the market was weaker in England, particularly London.
The South West enjoyed the biggest monthly price rise, up by 1.2%, while London saw the most significant monthly price drop, down by 2.5%. The North West experienced the greatest annual price rise, up by 3.4% and London saw the largest annual price fall, down by 4.4%.
London shows, on average, house prices have fallen by 2.5% since April 2019. An annual price fall of 4.4% takes the average property value to £457,471.
In Wales average house prices have fallen by 1.4% since April 2019 but they are still up by 3% year on year with an average property value of £159,428.
The market was found to be stronger in Scotland as prices increased by 1.2% month on month and by 2.8% year on year, taking the average price of a home to £152,801.
Sam Mitchell, Chief Executive Officer of online estate agent Housesimple commented on the figures. He said:
“The latest figures expose significant variations in regions across the country with strong growth still seen in certain areas. London’s price fall has plagued the UK average partly due to uncertainty but mainly because of the punitive stamp duty regime, while slowdowns in the South and East of England over the past three years have also taken their toll.
“Yet economic factors that underpin the property market are looking strong. Plus, the housing market is still showing sturdier than expected signs of resilience amid political uncertainty. Low unemployment and historically low-interest rates are leading to high demand from buyers supporting house price growth, particularly in the North West and West Midlands where prices soared to new heights in May.”
Mitchell further added:
“Overall, buyers are still coming to the market in their numbers, with separate figures for May showing that lending for house purchases was at its highest level in May since June 2016 which was just after the referendum took place. Buyer confidence should be music to the ears of prospective sellers. Many might have been waiting for Brexit clarity before selling, but understandably their patience, and that of buyers, is now wearing thin.”
As a Conveyancer, what is your opinion of the UK property market?