There are many Christmas traditions: roasting the turkey, trying to make brussel sprouts palatable, testing smoke alarms with a flaming pudding and, for many of us, the Boxing Day custom of looking at online property sites as we start to plan our next move!
Will this Christmas be any different?
The answer rather depends on what happens over the next few weeks.
There can be no doubt that consumer confidence has been affected by the ‘will-we won’t-we’ Brexit of the past few weeks. Certainly the whole of this last year has been an interesting ride on the FTSE100.
On the 19th November 2017 it stood at 7369. It then rose to 7769 in January of this year, fell to 6888 over the following two months, rose again to 7903 over the next two months, then gradually fell to 6955 in October. Since then, it has struggled to move much above 7200¹.
In terms of growth, the market has gone nowhere, and it is uncertainty that is holding it back.
The FTSE100 is an easy and immediate way of assessing market sentiment. Whilst it doesn’t correlate with the property market per se, consumer confidence is an unquestionable factor in both.
So what about the property market then? Statistics vary and they don’t all tell the same story.
A recent survey for Post Office Money from the Centre for Economics and Business Research² showed that the average time to sell a property had slowed from 96 days last year to 102 this year, with wide variations across the country.
For example, Bristol and the Midlands (although not Oxford) fare well on 70 days compared to London which has slowed to 126 days. Edinburgh and Glasgow are the hotshots at just 39 and 48 days respectively.
Of course London is a much larger market, and figures such as these must always be treated with a degree of caution. Nevertheless, there is a suggestion of a ‘slowing down’ in the South East.
On the other hand, another recent survey from the modular housing supplier Project Etopia³ shows that councils have significantly missed their new homes targets all over the country. This implies that there won’t be enough homes to meet demand, which should in itself be an inflationary factor for prices!
So where does this leave us? As with everything else these days, it leaves us watching with bated breath the progress of the current negotiations and trying to second guess the effects.
If we get a deal and start progressing with a degree of direction and confidence, I believe both the stock markets and the property market will react positively. Ultimately that may mean inflationary pressure builds, but this isn’t seen as a big threat.
If we bounce out without a deal, it could be unpleasant for property – at least in the short term – which suggests that fixed rate mortgages will be the most sought after solution when moving home, particularly for those looking to stay put for the long term.
Even so, buyers would be wise not to ignore any redemption penalties…just in case a hard Brexit leaves the property market taking a bumpy sleigh ride through a chilly winter!
And of course always remember, your home may be repossessed if you do not keep up repayments on your mortgage.
How do you think Brexit will affect the UK housing market and mortgages? Let us know by adding a comment below.