Brexit continues to hold a big question mark over the UK. The uncertainty of what lies ahead has, and is, impacting almost every industry – property being one of them. House prices have fallen, interest from buyers has declined, and stock levels are struggling to meet demand.
The hazy outlook resulted in housebuilders stalling future projects. However, with the extension of a Brexit deal in March, professionals can’t afford to wait for the EU-departure outcome any longer.
The ‘should we, shouldn’t we build’ debate in the industry continues to be unresolved. Financial results, reports and surveys announced, almost daily, continue to have conflicting conclusions.
To help make your job easier, our experts have gathered the latest and most useful property news in one place. While the information cannot give you a definite answer about how the Brexit outcome will affect your housebuilding business, you’ll at least have up-to-date insights at your fingertips when it comes to deciding your next move.
The housebuilders debate:
A round-up of the latest property news from June 2019
New research from Resolution Foundation has shown one in ten people across Britain own a second home.
One in six of second-home owners were born in the 1950s. However, 7 per cent of second-home owners are from the younger generation. Because a large percentage of people born in the 1980s (and later) have struggled getting onto the property ladder, Resolution Foundation states the small percentage that do have second-home wealth were born into rich households.
The downside to the increase in second-property-wealth is that it’s made first-time buyer figures fall. However, with second homes becoming more popular, it does give housebuilders confidence there are interested buyers, across many generations, searching for properties to purchase.
The National Audit Office report has found that two thirds of buyers, who used the government’s Help to Buy scheme, could have purchased a home without the financial help. One in 25 of these people also have household incomes of over £100,000. However, the report states that these buyers opted for Help to Buy so they could afford the house they really wanted.
Despite the downbeat findings from the report, the scheme has helped boost property industry profits with Redrow, Bellway, Taylor Wimpey, Barratt and Persimmon, confirming more than half of sales over the past five years were made under the initiative.
Help to Buy will continue until at least 2023. Some experts say housebuilding businesses can take this news reassuringly, as the scheme will support sales of new properties whatever the Brexit outcome.
Interest from new homebuyers showed signs of stabilising in May, said RICS’s UK Residential Market Survey. Yet, despite the buying market showing a slight glimmer of hope, the price of properties continued to fall. For example, the South East has been reported as having the weakest sentiment on price movement, yet London is picking up.
RICS Chief Economist commented on the report and said, “Some comfort can be drawn from the results of the latest RICS survey as it suggests that the housing market in aggregate may be steadying. However, much of the anecdotal insight provided by respondents is still quite cautious, reflecting concerns about both the underlying political and economic climate.”
The overall property news for June doesn’t exert complete doom and gloom for housebuilders in the industry. In fact, signs that new homebuyer rates are stabilising could even shed some positivity on the outlook.
So, if you’re a housebuilding business making future decisions, it seems the key outcome from June is to cautiously go ahead with projects, but do your research first. There are areas of the UK, such as Scotland, where property is thriving, whereas on the other side of the country in the South East the property market is struggling. Be savvy and smart with your execution and you should be able to ride out the Brexit wave.