Market slow-downs such as the one that the country – and indeed much of the World – finds itself in at the moment can be a worry for many, but it also represents an opportunity for others, and is also potentially a good thing for everyone.

According to the Office of National Statistics, the average house prices in the UK increased by just 0.6% in the year to February 2019, down from 1.7% in January 2019. The ONS point out that this is the lowest annual rate since September 2012 when it was 0.4%. Over the past two years, there has been a notable slowdown in UK house price growth, which has been driven mainly by a concerted slowdown in the south and east of England, which is often seen as the driving area behind much of the countries house-price growth. The lowest annual growth was recorded in the Capital, where prices fell by 3.8% over the year to February 2019, down again from a decrease of 2.2% in January 2019. This drop was mirrored by the immediate South East area around London where prices fell by around 1.8% over the year.

While there have been areas with small growth in the UK overall, the North West showed the highest annual growth, with prices increasing by 4.0% in the year to February 2019, this was followed by the West Midlands where growth was 2.9%.  This growth didn’t extend to Scotland though, where prices are actually falling.

But why is this, and should you be worried? What’s happening in the residential property market appears to have nothing to do with Brexit and is simply part of a drawn-out general slowdown.  So, it is likely to continue for some time, but it isn’t necessarily a bad thing. 

For one thing, homeowners tend to benefit; Low growth means that they are less likely to move, and spend any excess money on their homes instead. House prices spiralling out of control is always a problem for first time buyers too. They need some time to amass the deposit needed to get their feet on the first rung of the property ladder.  In periods of high growth, first-time buyers often see prices rising faster than they can save, so when prices start to stall or even back-pedal, they are given new hope of securing their first home. 

Low growth also prompts the Bank of England (BoE) to stimulate the market, and that can mean lower interest rates which further helps first time buyers realise their dream.  Many lenders will also look at their portfolio of products and push low cost mortgages as a means to attracting new business, and that gives first-time buyers a much greater spread of deals to choose from.

If you are a first time buyer and are looking at buying your first property – be it an established home or one of the growing new-builds – you should talk to Grange Mortgages about the types of product available, and view some of the great deals that we have.