At the end of 2019 the UK housing market weathered the storm of Brexit uncertainty and a general election and, as we head into 2020 with the threat of a coronavirus pandemic, it continues to show remarkable resilience, with Shropshire performing well compared with the national picture.
Following the UK exit from the EU, economic indicators have remained general positive and the economy, whilst not showing much growth, is broadly stable with low unemployment. With inflation also low the Bank of England is likely to keep interest rates on or around 0.75% and use its fiscal resources to support business, especially if the coronavirus outbreak spreads.
This economic stability together with a continuing shortage of supply means house prices in Shropshire continue to rise, currently the annual rate of growth is 2.7%, which is slightly above the national average of 2.2%. This means the cost of an average house in the area is now £219,207
Looking forward, surveys conducted by the Royal Institute of Chartered Surveyors suggest that more homes will be brought to the market in the spring which is traditionally the busiest time of year and, on average, properties in the West Midlands convert from “for sale” to “sold subject to contact” in 68 days.
This should result in an uplift in property sales completions over the summer of 2020 which will improve the very small (0.8%) drop in completions that was seen during 2019.
Average rents have also shown an increase, rising by 1.4% in the last 12 months. This is below inflation but tenants are now spending about 33% of their income on rent and 1 in 5 households are in the private rental sector. Many of these are younger people and families with children and records show that there are three quarters of a million more households with children in rented accommodation than 10 years ago.
At Morris Marshall & Poole with Norman Lloyd we are confident that the regional housing market can overcome the challenges it will face in 2020, as it did in 2019, with continued strong demand from buyers who see home ownership as integral to securing their future.
Martin Moore MIRPM MARLA MNAEA - Morris Marshall & Poole with Norman Lloyd, Oswestry.
Data Sources: Dataloft, HMRC, Bank of England, ONS, MHCLG, Rightmove, MMP/NL