The last quarter of 2018 has shown that the housing market is well on the road to recovery. The Autumn Budget’s measures to revitalise the industry, and the high levels of activity particularly from first-time buyers, mean that the property sector finished the year on a high.
Transaction volumes were at their highest towards the end of 2018, with over 100,000 sales in September and October – the highest levels since July 2017 and 1.3% higher than the same time a year earlier.
Mortgage lenders have also been more active in the final quarter of the year. Approvals rose by 4% in October compared to the same time in 2017, and the total amount loaned increased by 1.8%. The number of loans issued was at its highest level since January, and this appears largely to be a result of robust demand from first-time buyers. £5.5 billion was lent to this group – a 12.2% rise compared to October 2017.
All this meant that house prices rose by 2.7% in the year to October.
The outlook remains positive for 2019, with the HM Treasury Comparison of Independent Forecasts predicting that prices will increase by an additional 2.2% this year.
The economy in 2019 is expected to share in this positivity. In November 2018 inflation fell to 2.3%, its lowest rate since March 2017 – and it is expected to return to the government’s 2% target this year, meaning that consumers’ money will go further in 2019.
Average rents remain stable across the country, rising by 0.9% in the twelve months to November. Another rise is expected in 2019, as the RICS notes that stock levels are diminishing due to constraints on non-resident buy-to-let landlords.
In addition, demand for rental properties is expected to increase. In addition to affordability, JLL report that the desire to be chain free, try an area before buying, and live in a specific school catchment area are encouraging more people to rent – indicating that in many cases it is a lifestyle choice rather than a necessity.
Consequently, over the next five years average rents are expected to rise by 3.1% per annum, while sale prices are expected to increase by 2.3% per annum over the same period.
If you would like to discuss this market forecast, and what 2019 could have in store for your property, contact your local Thorgills branch today.