Uncertainty has plagued many sectors across the UK during the past few years of political strife, and while the housing market on the whole has been largely resilient, it has certainly had an effect in some areas. Some developers have been reluctant to push forward with plans, while both buyers and sellers have been more likely to err on the side of caution with their property investments.

However, while today’s “Brexit day” still leaves plenty of unanswered questions regarding issues such as trade agreements and our level of ongoing European involvement, it arguably marks the start of a new chapter for the housing sector.

Growing confidence

Buyer demand has already begun to climb according to the latest research, as people have begun the new year with renewed confidence in the country’s housing market. According to City AM, there was a 26% increase in the number of buyers looking for homes in the first few weeks of 2020 compared to the same period last year.

Notably, it is cities away from the capital where house prices are much more affordable which have seen the highest demand, according to Zoopla research and insight director Richard Donnell. These are areas which are becoming highly popular alternatives as a place to live and invest than London, such as Manchester, Birmingham, Leeds and Liverpool.

The general consensus is that confidence in the market will continue to increase post-Brexit, particularly once negotiations begin to progress over the coming year.

Stronger house prices

This month’s latest house price index from Nationwide has showed that the positive effects of the post-election period have already registered in the housing market. House values have risen by 1.9% from the previous year – a 14-month high – bringing the average UK house price to £215,897.

Rightmove’s index, which looks at the price at which properties are listed on its site, has recorded a 2.3% jump in the price of homes coming onto the market between December and January, which is the biggest recorded rise for the time of year.

Predicting the year ahead, Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: “Indicators of demand at the very start of the homebuying process are red-hot. We think the pickup in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%.”

Meanwhile, EY Item Club believes post-Brexit house prices will rise by 2.8% over the coming year, higher than the 2% they originally predicted, and the company says the increase could be even higher.

Learning from history

In an interesting feature by Seven Capital, house price trends that occurred during the 1970s, from when the UK joined the EEC (now the EU), through renegotiations within the union and a referendum in 1975, appear to be repeating themselves.

While confidence boosted the UK housing market in the lead-up to joining the EEC back in 1973, uncertainty at the time when the new Labour government came into power saw similar wobbles to what we have seen since the 2016 referendum. After the referendum back in 1975, once people perceived more security in the economy, the stats began to pick back up.

According to the report, we have already seen the embers of this with the “Boris bounce“, and what will happen next depends on the deals the UK strikes with the EU after Brexit. Seven Capital’s director Andy Foote believes now is an ideal time for more bullish property investors to press forwards.

He comments: “What is apparent and is important to take note of, particularly for property investors and buyers wondering whether to buy now or wait, is that whilst we’re in this period of uncertainty, house prices are still growing – however slow they might seem.

The mortgage market

Yesterday, Bank of England governor Mark Carney announced that the base rate would remain at 0.75% after the latest review. The move shows the organisation’s confidence in the country’s economy as Brexit talks progress, after it witnessed a rebound since the general election in December.

At present, the mortgage market in both the residential and buy-to-let sectors is on a high, with lenders competing to offer the best rates and borrowers being urged to lock in now. With Brexit on the horizon, this appears unlikely to change in the short-term, particularly after the base rate announcement.

The latest data shows that the number of mortgage approvals is currently soaring at its highest rate in four years, as consumer confidence continues to bounce back.

Kevin Roberts, director at Legal & General Mortgage Club, added: “[The] decision to hold the interest rate is unlikely to have an impact on consumers’ finances, at least in the immediate term. However, for borrowers, the continued low-interest climate and ever-growing number of products available have well and truly put consumers in the driving seat when it comes to securing a mortgage.”

 *Article Taken From www.buyassociation.co.uk