2015 has been a very interesting year for the UK property market. Read Quick Move Now’s property predictions for 2016.
Tougher lending criteria introduced as a result of the Mortgage Market Review (MMR) has led to the challenges for some would-be property owners, but the continued Help to Buy government scheme has offered a helping hand to those struggling to raise the large deposits needed.
Changes to tax rulings for buy-to-let owners have also been much discussed in the media. So, with an eventful year in the property market coming to an end, what might 2016 bring?
Quick Move Now’s Managing Director, Danny Luke, comments:
2016 looks set to be another interesting year for the property market. In preparation for the arrival of the European Mortgage Credit Directive in March, which will see less flexibility on affordability criteria, we’re expecting to see a very competitive property market at the start of the year.
Lenders are likely to be competing to complete as much business as possible before the new guidelines come into place, knowing that business is likely to slow significantly as both lenders and customers take time to adjust to the new rules.
The number of properties available to buy is likely to continue to be a problem nationally. Recent stats from home.co.uk have suggested that there are 47% fewer properties for sale than there were in December 2007, and 16.1% fewer than there were this time last year.
The property shortage has led to an 8% rise in property prices in England and Wales in 2015, but if people are cautious about moving because of a lack of choice of properties to move to, or if they struggle to secure a new mortgage because of the new Mortgage Credit Directive, supply will likely continue to fall and we could end up with a very stagnant property market.
Interest rate rises could further complicate things by slowing or even halting price rises, but any increases are likely to be held off until the latter part of the year, and if they do happen they’re likely to be very gradual.
Of course these are all national ‘headlines’ – there is still a huge amount of market variation throughout the UK, with some areas having an excess of properties that are struggling to sell.
We recently wrote an article about the ten most challenging places to sell a property quickly, and those areas are unlikely to see any rapid changes in the coming months. Whilst the East of England and London property markets are seeing rapid price hikes and a big shortage in supply matched with high demand, areas further north, in particular the North East, are struggling with low demand and no shortage in supply.
Average ‘time on market’ for a property in Sunderland is 330 days, compared to the national average of 104, and average asking price sits much lower at £156,235 – over £130,000 below the UK average asking price of nearly £290,000.
If you’re considering buying or selling a property in 2016 it’s important that you look at how the local property market is performing in order to manage your expectations effectively. Whilst national headlines are helpful in giving an overview of the property market, every region is different and the property market should be managed accordingly.