Many predicted that property prices could bounce back after a decisive election result, but few predicted it could happen before.
And yet, in November, UK average house prices increased by 2.2% over the same period in 2019, up from 1.3% in October 2019. This represents the highest growth rate since 2018.
While many buyers were holding their breath until after the election, it seems that delaying Brexit until January could have been enough to mobilise a significant number of first time buyers and house movers.
Sam Mitchell, CEO at online estate agent Housesimple, said: “Taking a 360 turn from the slowdown seen in October, house prices triumphantly recovered in November. The further delay to Brexit could have spurred on many sellers who were tired of waiting around, leading to the spike in property prices in November.”
However, it is a mixed picture. House price growth in England has been sinking since the Brexit vote punched a hole in the economy in 2016, and the country continues to have the slowest growth in house prices in the UK.
In England, the average house price grew to £251,000, an increase of just 1.7%. In contrast, in Wales the average house price grew to £173,000, an increase of 7.8%. In Scotland, the average house is now worth £155,000, a 3.5% increase, and in Northern Ireland house prices grew to £140,000, up 4.0%.
The annual increase in England was driven by the Leave-leaning regions in the West Midlands and North West. The lowest annual growth rate was in the East of England, where prices fell 0.7%, followed by London where prices only inched up 0.2%.
Mark Davies, Managing Director at Link Mortgage Services, said: “The figures show the London market cooling with the lowest regional growth rate, bar the East of England, and to some extent, the South East too. These regions have been stalled by Brexit uncertainty, a weaker financial sector and a mix of businesses typically not likely to benefit from the weaker pound.”
However, this could all change in 2020. John Goodall, CEO and Co-founder of buy-to-let specialist Landbay, said: “The Conservative landslide has kicked off the new year with some much-needed certainty, and even Brexit negotiations look set to turn a page in the coming months.
“As the year progresses, buyers and sellers alike are likely to feel more confident in the property market and looking forward, we expect an increase in transaction volumes. Optimistically, we may even see house price growth creep up to keep track with wage growth and inflation.”
Miles Robinson, Head of Mortgages at online mortgage broker Trussle added: “These figures are certainly positive for buyers and sellers, particularly following a period of economic and political uncertainty. Those who may have been holding off from buying or selling their home, could finally be putting their property plans in motion.
“There are currently conditions in place for the housing market to prosper amid low-interest rates, fuelling competitive mortgage deals, and increasing demand from would-be buyers. However, this could put more pressure on first-time buyers in the short term as prices continue to rise.”
However, as prices rise, the government will need to consider how to support those left behind. A number of initiatives for first time buyers were promised in the run up to the election, and all eyes will be on the Budget to see those pledges will translate into policies.
Josef Wasinski, co-founder of Wayhome said: “Last month’s election may have reduced some uncertainty and it could be argued this uptick in house price growth reflects positively onto the housing market.
“But the reality is, buying the right home remains out of reach for far too many trying to take those first steps on the ladder.
“Support was promised across the board for first-time buyers during the election campaign so these words should be put into action. We need genuine change within the housing market for those aspiring homeowners wishing to leave ‘generation rent’. Innovation will encourage change while providing credible, affordable routes to homeownership.”
