Will house prices fall in 2019?

This fall comes on the heels of another modest monthly growth of 0.3% reported in April. Nationwide's analysts conclude that these figures indicate consumer confidence is presently somewhat 'subdued'.

A restrained housing market

Thanks largely to the Brexit deadlock and Theresa May's impending departure from office, 'subdued' is also a good description of the economy in general. Therefore, it's hardly surprising that buyers and sellers are not particularly keen to be making proactive decisions about housing market decisions. As always, those who must trade for other reasons will still tend to do so, with many buyers conscious that they may even be able to secure a modest discount in return for showing a willingness to move forward in a reticent market.

Transactions and mortgages broadly stable

According to Robert Gardner, the Nationwide's chief economist, property transactions and mortgage approvals are remaining 'broadly stable', In fact, statistics show a gradual recovery of first-time buyer numbers in recent times with 359,000 reported over the year to March 2019. This first-time buyer increase has been accompanied by declining interest rates on small-deposit mortgage contracts as compared to mortgages with larger initial deposits.

Meanwhile, the EY Item Club's chief economic adviser Howard Archer has also commented: "It is possible that the avoidance of a no-deal Brexit at the end of March has provided some support to housing market activity through easing some of the immediate uncertainty and concerns. However, we suspect any boost to the housing market from the avoidance of a disruptive Brexit at the end of March will prove limited in both size and length."

RICS assessment supports Nationwide's conclusions

A poll of surveyors by the Royal Institution of Chartered Surveyors (RICS), conducted in March 2019, also found a market in which sales were weak amid declining buyer interest. It is worth noting however that RICS data does not include house prices, but simply logs a positive or negative balance based on where RICS surveyors believe prices are moving. These sector indicators describe a 'modest fall in house prices at the national level over the next couple of quarters' with London and the South East being the only regions where house prices are anticipated to show real falls over the year ahead.

A large number of RICS surveyors were clearly of the opinion that Brexit remains a key reason for the falling price phenomenon. Steve Gadsby of Derby-based Gadsby Nichols reported: "Brexit is still the main issue causing market uncertainty. This is particularly relevant to mid- and higher priced properties where purchasers seem to be awaiting a Brexit outcome before commitment."

The average time it takes a property to sell (19 weeks) remains unchanged. This is the joint longest period recorded since the collection of RICS data began back in 2017. Nevertheless, homes in the south east of England take the longest of all to sell with an average selling time of 21.5 weeks. Once again, surveyors say, the continuing decline in new listings seems to have 'intensified of late'.

So Britain's buyers and sellers are largely in 'wait and see' mode for the present, with housing market activity tending to remain suppressed but stable in a financial climate where no one wants to blink first. Whilst this may not be ideal for many, it does at least have the virtue of being easy to understand and predict. What will be rather harder to determine is precisely which of the various Brexit resolutions touted will eventually be adopted, and what impact that solution will then have on the future stability of the UK housing market.