2018 was certainly a year of ups and downs in the property market, with the overriding factor in the last quarter being the imminent break from Europe as well a continued hangover from the stamp-duty changes made over 4 years ago! As we move closer to March 29th 2019 (the official date of Brexit), there remains a certain level of uncertainty in the market, however this should be tempered with some optimism. Agreed sales at John Thorogood in December and January have been up versus the previous four months. And people clearly still need to move! New registrations from buyers needing more space have indicated that Brexit or no Brexit, life goes on. Furthermore, people are looking at the gains that property could make in the post-Brexit period.
Interest rate uncertainty
Something which is currently subject to extreme uncertainty throughout 2019 is interest rates, with the Bank of England having already increased rates last year for only the second time in over a decade. On the one hand Mark Carney, governor of the Bank of England, has indicated that the Monetary Policy Committee (MPC) will continue to gradually increase the base rate in 2019. However, Carney has tempered this intended rise in base rates by stipulating that in the event of a disorderly Brexit the MPC would be prepared to similarly cut rates in order to support the economy.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “It looks set to be an intriguing year. We expect interest rates to end the year around 1% and mortgage rates will reflect this.”
Competitive mortgage market
During the course of 2018, the competition in the mortgage market has become rife with more offers available and more options to entice buyers into the market than ever before. Looking to 2019, there is no indication that this competition between lenders will subside, making mortgages more accessible to a wider market. Currently, there are 1,459 cashback incentives available on residential mortgages which is nearly two-and-a-half times more on offer than in 2011, according to Moneyfacts.
David Hollingworth, of L&C Mortgages, offered: “This year has been very, very competitive with mortgage lenders pushing hard to attract borrowers. I don’t see a reason why that would change in 2019 and it might just be a tighter market with even more intense competition.”
First-time buyers
2018 saw an unprecedented number of first-time buyer transactions in the property market, with numbers reaching an 11-year high. With the news from the Budget that the Help to Buy scheme will be extended a further two years, many potential purchasers should also join the property market in 2019. Often, saving for a deposit is the chief hurdle for those wanting to buy a home, however with the availability of deals for people borrowing 95% of their home’s value soaring to 304 different mortgage options, this hurdle is now being circumvented by the mortgage industry. With more mortgages with lesser deposits available, as well as shared ownerships and purchase schemes offered, we should see first-time buyers once again on the rise throughout the course of the new year.
