The Market 2018
Let us start with 2018, which was peppered with challenging market conditions for residential property sales.
Because our trading year runs January to December we can report on the full picture for 2018, which may indicate the direction of travel for 2019.
Surprisingly, some branch productivity levels for house sale revenue was at or above 2017 levels, especially in the village locations. That outcome however doesn’t for one moment disguise the fact that during the first half of 2018 we saw one of the poorest levels of house sale transactions for some time, however, buyer positivity surfaced in the summer and remained reasonable through to December despite the increased chaos around Brexit.
When we say house sales were up in the second half of 2018, we are talking about house sale volumes not prices. Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake.
The rental market performed extremely well in 2018, with a notable uplift in activity for high end rentals outside of London, especially in our core area of operation on the Berkshire / Hampshire borders.
Properties taken to the rental market in the £7,000 to £10,000 p.c.m. sector frequently saw rental offers from multiple tenants. This was driven by high end house buyers deciding to pop into a property rental for the next year or so, using some of the stamp duty funds they would have allocated on a property purchase around £2.0m. or £3.0m., and then wait and see how property values shape up post Brexit.
One thing that is certain, is that uncertainty impacts on the property market especially around the times of a General Election or a Referendum. How this uncertainty works its way into tangible outcomes for 2019 is not straightforward and varies in different house price sectors of the property market.
In the short term, house buyers generally will be more cautious and slower in their decision making. This doesn’t mean house prices will fall, because buyer demand remains steady and employment levels are excellent. There is the prospect of a flat market in respect of property prices, however, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. House sellers will sell successfully in the 2019 market, but they can’t expect a fancy or inflated price and must engage with the reality that over pricing will fail in a market where buyers are cautious.
Different sectors, different outcomes in 2019
Different market sectors will have different outcomes in the forthcoming months ahead. Buying decisions on property sales from around £250,000 to £1.5m. are mostly made by very localised factors such as schooling, access to work, general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings). Decisions around such matters of day to day life will continue to be made by house buyers against the backdrop of political uncertainty, so house sales will be maintained at the current level with price sensitivity being the watchword.
Further up the property price sector, and especially in the £2.0m. to £6.0m range house buyers will be more influenced by global and political factors so we could see further negative price impacts in this sector. Savvy top end buyers are playing a waiting game, but they are there on our books and will respond to excellent marketing and a competitive price strategy.
House sellers and buyers should approach 2019 with realistic expectations, engaging positively with the new beginnings for the country and house moving opportunities and, who knows, there might well be some pleasing outcomes to report at the end of 2019.
We wish you a happy Christmas and the very best for 2019.
John Holden – Chairman and Managing Director McCarty Holden