Yahoo Finance Brexit is going to hurt house prices in 2019
The British housing market could crater in 2019 due to ongoing uncertainty over Brexit negotiations.
The 2019 UK Residential Housing Forecast by The Royal Institution of Chartered Surveyors (RICS) predicts the current weakness in sales activity will continue.
A lack of clarity and confidence over Brexit, problems with affordability, potential interest rate rises and a lack of homes for sale on estate agent books have all come together to stymie the market.
2019 is unlikely to see any sales growth, as weak demand from 2017 and 2018 looks set to continue. Figures for the number of completed transactions remain below the 1.7m high in 2006.
Continued forecasted falls in sales activity, and a slowdown in house price growth are anticipated to come to a halt halfway through 2019, leading RICS to predict static house prices.
READ MORE: No-deal Brexit almost certain to trigger UK rating cut – Fitch
Tarrant Parsons, RICS economist said: “Demand has tailed off over recent months, with Brexit uncertainty causing greater hesitancy as the withdrawal deadline draws closer. That said, the current political environment is far from the only obstacle hindering activity with a shortage of stock continuing to present buyers with limited choice, while stretched affordability is pricing many people out.”
Growth in new builds has also slowed, falling under government targets and seeing stock levels near all-time lows during 2018. There are also fewer enquiries from potential buyers, which adds to the anticipated gloom.
RICS report that market appraisals have declined year-on-year for November, meaning that those levels will continue to be depressed.
Hew Edgar, RICS head of policy, called upon the government to act on uninhabited homes to help address problems in the market: “If the Government wish to alleviate market concerns… all possible approaches and outcomes should be considered, including looking at tackling the rising number of long-term empty homes – which number 250,000 across the UK; a figure that borders on the Government’s new homes target.”
While the housing market remains downcast, the rental market is unlikely to offer any hope to renters. Supply remains constrained, with demand likely to push rents up further in 2019.
