Apr 04, 2019

What to expect for the UK Property Market in 2019?

There is no way to lie: there is not one person in the whole of Europe who is not or were not uncertain about Brexit and its consequences. If you work with Property Market or even if you own one or more properties, you are twice as worried about what the future holds for the UK and our economy. At this point, we don’t even know for sure IF there will be a Brexit at all.

But, we can all remain calm, because according to studies and specialists reports, the Brexit (if it actually happens) will be good for everybody.

According to property specialists Adam Challis and Andrew Frost, for example, the Government will put all efforts and attention on domestic policies and the Brexit influence will soon be forgotten.

This “attention” include affordability, taxation, regulation in the private rental sector, affordable homes, housing supply, land value intervention, lack of skilled labour and digital construction and much more.

They assume that “a Brexit deal is hammered out over the coming months and that we have a transition period until the end of 2020. During this time, greater political certainty will instil renewed confidence to UK businesses and consumers leading to improved housing markets.”

New housing supply across the range of tenures, geographies and affordability levels will be reasserted as the number one priority. Incessant focus on enabling first-time buyers has been to the detriment of priorities that address the needs of older people, alongside the very basic capital investment required in affordable housing to offset the ballooning housing benefit bill.

But it’s not all roses: Despite efforts from Homes England, the challenges of housing delivery will get harder, not easier. Build cost inflation remains stubbornly persistent as the skills crisis grows.

Irrespective of Brexit impacts on labour, there is little to reverse the tide of greying workers retiring and the need for the industry to pivot towards manufactured solutions in digital construction. The lifting of borrowing caps is also expected to spawn a new wave of direct delivery from Local Authorities. However, without their former expertise or current capacity for direct delivery, this is likely to be more successful through partnerships with the private sector in the medium-term.

The supply-side policy shift, notably in land markets The Letwin Review encourages diversity on large sites to speed up delivery rates. This will require some creativity from master developers, but there are options such as a more mature multifamily offer alongside the spectrum of affordable housing solutions and, where appropriate, even co-living solutions. The Government response to the Letwin Review is due out in February and we expect that policy attention will shift towards land values to create more headroom for homes that can be delivered at or below current market prices. This is right in principle, but very difficult in practice.

As ever, opportunities and challenges are both well represented for the UK housing market over the year ahead – and all the studies show that we will overcome these challenges better than expect it.

You can download the full report at https://www.jll.co.uk/en/property-predictions?gclid=Cj0KCQjw1pblBRDSARIsACfUG13iXEmIUHoh3oLEewne2ti9ZU5m-KMqADkCWrA-frqdcnMZ1rQchLcaAt2HEALw_wcB