Over the last few months, the one thing that has been constant is change.
We started in the UK with our change of Government back in July, the hope of a new administration quickly dissipating to reveal the reality of an overdrawn national bank account and a lot of unpleasant choices available to spur “growth”, the stated end goal of new incumbents. Across the channel, we have seen the engine rooms of Europe; Germany and France, brought to their knees by the populist right, destabilising their longstanding equilibrium. Over to the west, on the other side of the pond, after a seemingly never-ending and particularly savage presidential race, the MAGA warrior Donald Trump has got the keys back again to the Oval Office, leaving the world to guess which nations would be “hired” and who would be “fired”.
You would be forgiven for thinking that all of the turmoil and change might have a detrimental effect on the UK housing market, normally driven by confidence and certainty, but, for the moment at least, quite the opposite is true. Despite the political upheaval, the UK property market has shown remarkable resilience.
Recent data indicates that average asking prices have increased, with a notable bounce in the new year.
This surge can be attributed to several factors, including a strong demand for housing and a limited supply of new properties coming to market. The Royal Institution of Chartered Surveyors (RICS) has reported a positive sentiment among surveyors, with expectations of continued price growth over the next 12 months. This optimism is bolstered by the government's commitment to boosting housing delivery and reforming planning policies.
However, it's important to note that the market is not without its challenges. Rising gilt yields and concerns about inflation could push up borrowing costs, potentially dampening buyer confidence. Additionally, the impact of international trade policies, particularly those from the US, could influence the UK's economic stability and, by extension, the property market.
On the other hand, the strong dollar also provides an incentive for wealthy Americans to consider the UK as the destination of choice, offering great value again with all the familiar comforts of home without any of the language and cultural constraints they might find in mainland Europe.
In conclusion, while the world is indeed changing, the UK property market has so far managed to navigate these turbulent waters with surprising stability. The coming months will undoubtedly bring new challenges, but for now, the market remains buoyant and resilient.
Why not have a free consultation with one of our property finance experts at Capital Private Finance to see how, in a changing world this might be just the right time to buy.
Author:
James Keable
Financial Services Director
Capital Private Finance Limited
