UK's inflation-adjusted house prices were down by 1.36% y-o-y in Q1 2019
House prices in UK are still rising, though not in inflation-adjusted terms. The average UK house price rose slightly by 0.43% (but actually dropped 1.36% when adjusted for inflation) to £212,694 (US$ 269,122) during the year to Q1 2019, based on the figures from Nationwide. It was actually the lowest y-o-y rise in six years. Quarter-on-quarter, real house prices fell by 0.51% during the latest quarter.
London and Outer Metropolitan were the two worst-performing regions during the year to Q1 2019, with house prices falling by 3.84% (-5.55% inflation-adjusted) and 2.01% (-3.75% inflation-adjusted), respectively. Some high-end London districts have experienced significant price-falls.
The UK housing market will likely be at a “standstill” this year, but the chronic housing shortage will prevent a significant drop in prices, according to the Royal Institution of Chartered Surveyors (RICS). Property transactions are expected to fall by about 5% in 2019 from a year earlier, mainly due to the political and economic uncertainty surrounding UK’s Brexit referendum, with buyers taking a more cautious stance.
Rents, rental yields: London yields are poor, at around 2.6%
London apartment costs are very expensive, at €18,057 per sq.m.
|UK: typical city centre apartment buying price, monthly rent (120 sq. m)|
|Buying price||Rate per month||Yield|
|London (Prime Central||$2,166,840||$4,715||2.61%|
Recent news. The UK economy grew by 1.4% in 2018 from a year earlier, down from a growth of 1.8% in 2017 and the slowest pace since 2012. Then in Q1 2019, the UK economy showed some improvements, with GDP growing by 0.5% q-o-q, up from a quarterly growth of 0.2% in Q4 2018, buoyed by unprecedented stockpiling by manufacturers fearful of the impact from a no-deal Brexit, according to the Office for National Statistics (ONS). As such, the Bank of England recently raised its economic growth forecast for 2019 to 1.5%, from its earlier projection of 1.5%. In May 2019, the central bank kept the benchmark interest rate unchanged at 0.75% (the highest level since February 2009), after raising it by 25 basis points in August 2018.