House prices will fall this year as Brexit uncertainty freezes market, Budget watchdog predicts
HOUSE prices across the UK are expected to drop by the end of the year for the first time since 2012, according to an official Government watchdog.
The Office for Budget Responsibility (OBR), which analyses the Government's finances, predict that house prices will fall by 0.3 per cent in 2019.
It's a sharp contrast to its five-year forecast made in October 2018, which saw house prices rise by more than three per cent in the last three months of the year.
Experts have blamed the lagging property market on a dragged out Brexit and lack of affordability.
In the published on the same day as the Spring Statement, the OBR said: "Indicators of housing market activity and price expectations have deteriorated significantly since our October forecast and are consistent with a further fall in house price inflation."
Over the past four months, house price growth has "slowed significantly"; reaching 2.7 per cent down from 4.6 per cent the year before.
Now, it expects growth to slip below zero for the first time since 2012, and far below the record rate of seven per cent recorded in 2016.
The damning forecasts come as the Royal Institute of Chartered Surveyors (Rics) published its monthly market survey and warned that more than three quarters of the 300 surveryors who gave feedback believed Brexit was holding back the market.
It believes that drawn out uncertainty is putting off buyers and sellers who would rather wait for the outcome of the negotiations.
The group also found that activity in general has seriously slowed down, with new buyer enquiries and agreed sales falling for the sixth month in a row.
Hew Edgar of Rics said it was clear from the survey that the "wearisome state of British politics that has arisen from Brexit" is taking its toll on housing.
How to haggle house prices
WE spoke to Russell Quirk, founder of eMoov, about how to negotiate with sellers to get your dream home for less:
- Do your research - Check out price growth, transaction levels and statistics on buyer interest. If all three have been stalling overm the past few months, you know you are in a stronger position as a buyer and there is a good chance you can submit an offer below asking price successfully.
- Start low - Going straight in with an offer way below asking price can be viewed as insulting by a seller and work against the buyer.
- Build a good relationship with the seller - The relationship between the seller and the buyer is important and should not be underestimated. If you find yourself in a a lengthy chain or your mortgage surveyor down values the property and you need some extra time to find additional funds, it might help to have the seller on your side.
- Know your position - First time buyers are in a strong position thanks to being at the bottom of the chain. Those who only have a mortgage in principle, a long chain and are in no rush to move won’t have the same bargaining power.
- Be persistant - Don't be afraid to chase your seller’s agent yourself. Ask for regular updates, what length of the chain is, if there are any issues and if there is anything they are waiting on from your end.
- Stay organised - If the seller has reduced their price only for you to drag your heels, they may decide to go with another buyer. By having your surveys complete and your paperwork up to date, the sale can proceed as quickly as possible and you can complete on your dream home at a reduced price.
Last night, Theresa May warned MPs that Brexit could be dragged out for another two years after she suffered yet another defeat in the Commons.
Mr Edgar added: "UK parliamentarians must recognise that the prolonged uncertainty without effort to address separate key issues in the UK is damaging confidence in the housing sector, and we share the resounding sentiment of frustration from our professionals."
But the OBR doesn't expect the slump to last, as it predicts overall property prices will rise by up to 17 per cent over the next five years.
Plus, we've spoken to property professionals who feel that uncertainty puts first-time buyers in a strong position.
Even though there may be fewer properties on the market, first-time buyers have the upper hand when it comes to haggling down prices with homeowners who are desperate to sell.
Simon Nosworthy from Osbornes estate agents previously told The Sun: "Brexit has made the property market inviting for first time buyers for some time and arguably things have never been so good for them as prices have been falling and interest rates remain at historic lows meaning that there has never been a better time to buy a property.
"Now is a good opportunity to buy and purchasers should negotiate hard when putting in their offer."
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