Newly released figures have revealed that, over the next 12 months, the average price of a home in the UK is set to slip by around 1%.
According to the data released by Home.co.uk, the national figure will be driven down by further falls in the value of homes in the three areas that have already retreated into the red during 2018: Greater London, the South East and the East of England.
Latest asking price figures compiled by Home.co.uk show that, in the 12 months to December this year, prices fell in the capital by 2.5%. That figure is set to be 3.5% by the end of 2019, as sentiment worsens and homebuyers play 'wait and see' while the value of London homes slides further.
The capital's renters are also set for a torrid 2019, with a dramatic shortage of available rental properties causing rents to soar further. They have already climbed 6.3% in 2018, driven by scarcity. Over the last two years, supply of rented accommodation has plunged by 34%.
House prices in the South East fell by 0.8% this year and the rate of decline is set to increase to 2% next year. The East of England's 0.6% drop in 2018 is predicted to more than double to 1.5% over the next 12 months.
Meanwhile, the South West is set to join these regions in the red. In the 12 months to December this year, prices in this region increased modestly by 0.7%. But Home.co.uk says the South West's property market could see a price fall of 1% over the course of 2019.
Some of this year's most successful regional property markets are also set for a hammering in 2019.
In the West Midlands, prices have shot up by 5.2% in the 12 months to December 2018 but are set to rise by a far lower rate of just 2% next year. And the East Midlands, which saw annual price inflation of 3.6%, should brace itself for zero growth during 2019.
By contrast, Home.co.uk anticipates only a small drop-off in house price inflation in the North West and Yorkshire. The North West saw house price inflation of 4.8% this year and prices in Yorkshire rose by 4.7%. Both should still see growth of 4% next year.
Wales's remarkable price growth last year, of 7.4%, also looks set to continue. Five years ago the principality's property market was stagnating due to oversupply while prices rocketed across the South East. Now the boot is on the other foot as the Welsh market tops the growth chart, with prices set to rise by another 7% next year.
However, the prospects for Scotland's property market look less favourable. While prices have risen by 2.2% during 2018, the increase next year is set to be a more modest figure of around 1.5%.
Stagnation in the North East is also set to continue during 2019. Prices stalled with just a 0.6% rise in the 12 months to December 2018. Next year prices are unlikely to lift much above 1%. This inactivity is a result of years of insufficient reinvestment in this former industrial powerhouse, says Home.co.uk.
Doug Shephard, Home.co.uk director, had this to say: “Looking ahead to 2019, our trend indicators suggest that national price growth will likely be in the red by 1.0% towards the end of next year.
We don't expect London prices to pull out of their shallow dive until 2020 and, what's more, other regions look set to slide into negativity in 2019. Going forward, the major challenge for estate agents will be to manage the expectations of vendors in the growing number of regions where prices are sliding. Failing that, property auctions look well placed to profit from the increasing numbers of frustrated sellers in and around London.
Brexit is not to blame. Sure, May's mess is not helping, but the current post-boom hangover was 'baked into the cake' when the Bank of England reduced rates to historic lows back in 2009.”