It’s been a bumpy few years with economic uncertainty a general rule of thumb whilst Brexit negotiations and General Elections rumbled on. The uncertainty in Parliament filtered through into business and investment, and out into the wider economy, stalling potential and progress whilst the country waited for resolution.
Although the UK property market was still growing it was at a slower pace than if the environment was more stable. Dramatic shifts in UK policy towards its exit from the EU meant that currency markets and inward investment from outside the UK was volatile.
Thanks to the resounding Conservative victory in the December election that now appears to have been resolved and although there is still some way to go in the negotiations for a free trade deal, the pathway and destination appear much clearer than at almost any point since 2016.
Just this week Nissan confirmed that they could exit the EU altogether and relocate their production to the UK post-Brexit. This should and will be seen as a huge boost to the Prime Minister, who has been championing his own economic plans, and for one of the world’s biggest car makers to essentially say they’ll ramp up activity in the UK come what may, could go some way towards reassuring others.
If we imagine that from 2016 up to this point we’ve been growing slowly from a position of weakness, then the next few years should be the time for the economy and the property market to start flying.
Mortgage Approvals
We now have evidence that this is the case as Nationwide released price growth figures and the Bank of England revealed that the number of mortgages approved for house purchases rose to 67,241 – the highest since July 2017 – from 65,514 in November. The value of mortgage lending rose by £4.55bn, compared with an average of £4.2bn over the previous six months.
This supports the broader theory that the market is starting to heat up again after cooling since the referendum. Most signs are pointing toward increased activity and better results. Prices are increasing and activity is on the up.
Halifax, Right Move and RICS have also all reported increased activity since the election as well, indicating that the upturn is being experienced right across the market.
One key factor is thought to be the fact that the Bank of England held interest rates rather than raising them, as they attempt to ensure that any increase is maintained. The minutes from the recent meeting shows that representatives at the bank expect the property market to have grown significantly in the last quarter of 2019 and the first quarter of the new year.
2020
On the whole, it’s not surprising that house prices are expected to grow fairly significantly this year considering the turbulence of the previous three, but it will still come as pleasant news to investors, landlords and agents alike.
There are even signs that productivity is recovering in manufacturing and other industries across the wider economy, which is thought to be showing that the economy, almost flat throughout the last quarter, is set to expand with encouraging results.
As the statistics start to emerge to support that theory, it would be fair to say that 2020 is set to be a good year for UK property.