Housing, Property Law and Conveyancing – Autumn 2019

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Market Matters

In this regular feature, Banking & Finance Litigation Associate Abbie Swales provides an update and commentary on trends and issues in the UK property market.

Despite the continuing political and economic uncertainty due to the further delay of Brexit until January 2020, the housing market continues to show a degree of resilience with house prices largely staying flat throughout the second and third quarter of 2019. In October 2019 Halifax reported that average house prices fell slightly by 0.1% but that overall there was a modest annual rise of 0.9%.

Whilst Brexit doesn’t appear to be having an especially large impact on house prices, it does appear to be having an impact on the number of properties being placed on the market and subsequently bought. The RICS is reporting that Brexit uncertainty is causing both buyers and vendors to hesitate, resulting in a decrease in buyers’ enquiries of 15%. The RICS also notes that new instructions fell by 37%, the weakest since June 2016, although suggests that this is expected to stabilise within the next 12 months. In respect of the lettings market, the RICS notes that demand from tenants has risen firmly for the eighth month in a row and rent expectations for the next three months remain positive.

UK Finance research about mortgage lending in the Northern Powerhouse noted that the mortgage industry helped 84,900 first time buyers (FTB) in the North of England in 2018 – up 3% on the previous year and the highest level since 2006. In addition, it notes that there were 80,400 homemovers in the North of England in 2018 – up 1.1% on the previous year and the highest level since 2007. This contrasts with an overall decline in homemovers across the UK in 2018.

According to UK Finance’s latest figures on lending trends more generally across the UK, there were 33,300 new FTB mortgages completed in August 2019 – 2.1% fewer than in August 2018; and 33,610 homemover mortgages completed in August 2019 – 8.2% fewer than in August 2018. The average loan size in August 2019 was £175,289 for FTB’s (+4.86% since May 2019) and £232,556 (+6.07% since May 2019) for homemovers.

It is clear that political and economic uncertainty continue to have some impact on the market, in particular, the level of supply and demand within the market and the flatness of house prices. However, there does appear to be more positive trends in certain regions and specific market areas such as the rental market and second charge mortgages.

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Consultation on new shared ownership model

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