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Property Price Update – June 2019

Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

News from the UK Property Market

As the summer of 2019 kicks off, the property market has continued to be subdued in terms of annual house price growth. Unfortunately, May’s growth slowed to 0.6%, putting a stop to the upward trend the market had been enjoying for the first few months of the year.

Month-on-month, there’s been a -0.2% change from April to May, which also bucks the month-to-month growth trend the first quarter experienced. These results are disheartening after months of slow but upward growth, but all we can do is hope that the summer brings in a wind of change for the market. May marks the sixth month in a row that annual house price growth has been less than 1%.

Average house price growth has continued to grow, albeit infinitesimally.

The average house price in May was £214,946, a very slight but encouraging increase from April’s £214,920. 

This slight increase continues the very recent turnaround after price drops in previous months, so we can only hope the good fortune continues and growth continues to pick up.

Other trends in the housing market

Other indicators of housing market activity such as the number of property transactions and mortgages approved have remained consistent over the last few months. Exactly how long this will remain the case is yet to be seen as consumer confidence has still not bounced back from the turn of the new year and new buyer enquiries have remained steady.

The housing market will largely reflect the broader economy and will shift with the outcome of the ever-present Brexit deal. Right now though, a healthy labour market and low borrowing costs are driving the consistency of activity, but uncertainty will almost certainly impact price growth and transaction levels in the near future.

Deposit continues to hold borrowers back

Strong labour market conditions, low borrowing costs, a steadily rising employment rate, and increasing earnings growth have all helped first-time buyer numbers grow over the last few quarters.

Despite house prices being disproportionate to income, the average mortgage payment remains manageable for most in the country, with London and the South East always the exception. Elsewhere, the challenge remains to actually save the required deposit.

Even in more affordable regions many home buyers still need to save 15% of their income for more than 5-8 years to have enough for a 20% deposit. In London, that number skyrockets to 15 years of saving!

A helping hand

Fortunately, for many buyers, they have help raising money for a deposit from loved ones. The government has also introduced various initiatives to help people get on the property market, such as the Help to Buy scheme, which has helped 14% of first-time buyers get into their first homes.

A whopping 40% of new builds were purchased using the Help to Buy scheme in 2018. There have also been new (or oft forgotten) mortgage products that lenders are now offering to help more first-time borrowers get on the property ladder and some providers have adjusted rates accordingly to make deals for those with smaller deposits just a bit sweeter.

Mortgages for Doctors and Dentists

Always remember to visit our site monthly for your regular update on the nation’s property prices.

If you’re planning to buy or sell property this year contact an advisor for personalised advice. 

At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, get in touch with us today.

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