Pausing Property

 

A couple of interesting reports have been issued recently that give plenty to ponder on the property front.

 

Firstly, Halifax (the UK’s largest lender) has issued its quarterly housing report and has summarised that prices fell by 0.2%. This is the first quarterly fall since November 2012.

 

Secondly, Legal & General’s annual survey has revealed that the ‘Bank of Mum & Dad’ is the tenth biggest UK lender as buyers increasingly rely on financial support from their parents. Parents will lend around £6.5 billion in 2017 and be involved in 26% of all UK property transactions (up from £5 billion a year ago).

 

Property is a big deal in the UK and politicians are only too aware of the emotional relationship and reactions to housing……which in turn impact the economy greatly. When prices are rising, consumer spending and borrowing increases due to a perceived increase in financial confidence (and vice versa).

 

However, with house prices stalling, it suggests that housing valuations may be peaking in the short term and could have a detrimental impact on the UK economy. This could be driven by general uncertainty regarding the General Election and (of course) Brexit but the biggest issue is that the average first-time buyer requires a deposit of around £26,000.

 

A deposit of that size is always going to have a detrimental impact on buyer demand and there is only so far the ‘Bank of Mum & Dad’ will stretch.

 

Housing is a big topic and one that so many can relate to emotionally. It will be interesting to see what stance and pre-election giveaways are promised by the different political parties in the run up to polling!