The UK property market has gone through a rollercoaster of a ride over the past decade and house prices roared all the way until the Brexit vote back in 2016. Where will House Prices go next is a question often asked in this new protectionist era.
The news has certainly not been slow for the past week as global turmoil continues due to the Trump and China trade war which sent global stock markets around the world into a sea of red. However, on the property front all is rather quiet as Summer is here and the traditional slowdown in our industry looms. Data provided by HouseSimple identifies a decline in property listings across 100 major UK towns and cities declined by 3.3% in July. This is due to a smaller number of houses coming to market due to the summer holidays. However, according to Halifax House prices saw quarterly growth of 0.4% and annual growth of 4.1%. This shows how robust the property market is considering all the complications we face as politicians play roulette with the country’s future prospects.
Looking back on the market over the past 10 years since the global financial crisis when house prices crashed by 15.9%. Between 2008 -2019 the average price of a Semi-detached property was from £162,201 to £291,087 which increased by 35.07%. For England and Wales Semi-detached properties values rose the most, however in Scotland Detached property values rose by the greatest amount. The market recovered for most regions of the UK and Semi-detached were the most profitable investment regardless of location.
Compared with alternative property types terraced homes increased by 33.93% from £139,195 to £186,418. Flats have seen a growth of 32.78% from £150,878 to £200,341. Closely followed by detached houses which increased by 32.61% from £262,199 to £347,706. Semi-detached remain the most popular as they bridge the gap between first-time buyers and second- or third-time buyers. Semi-detached properties offer the extra space needed without the premium price tag a detached property carries. Semi-detached properties are ideal for Buy-to-let landlords providing a perfect balance and maximum rental income.
As the imbalance in property continues due to a shortage of housing, prices are likely to increase in the long term. The big question remaining is the uncertainty around Brexit as we are more likely heading for a no-deal Brexit. As the market has already priced in this uncertainty the question still remains which way will house prices go. One of the biggest stirs in the mortgage market now is the idea of moving the burden of stamp duty from buyers to the seller. This may help first time buyers and those progressing the ranks of home ownership. To conclude the main issue with this ideology is it will not incentivise people to downsize creating a further shortage of larger houses at the top end of the market.