The UK property market never fails to keep us all on tenterhooks. Market trends and behaviour can swing from one end of the spectrum to the other in the blink of an eye. 2017 saw the property sector standing strong in the face of the uncertainty that is Brexit, first-time buyers rejoiced as stamp duty was axed, and demand for housing took centre-stage in parliament.
So, as we enter 2018 we’ve put together a list of our top housing market predictions for the year.
- House building will be a priority
From 2016-2017 housebuilding increased by around 20%, bringing it back to pre-financial crisis numbers. Net migration fell during 2017, with many EU nationals choosing to return to their native countries in the wake of Brexit. This, alongside an uplift in construction of new build homes means 2018 should be the year where supply and demand begin to make serious strides towards balance.
- Inflated rents grind to a halt
As well as a ban on agency letting fees (due to take effect later this year), Landlords have found it difficult to justify an increase in rental prices. In London, the average rent fell in 2017, and as Londoners continue to battle against stagnant wages and rising inflation, many foresee no serious price increases in the London or national rental market this coming year.
- Stamp duty cut stems property price increase
Last year’s budget saw stamp duty axed for first-time buyers looking to purchase properties of up to £300,000. Although this will save first-time buyers a considerable portion of these upfront fees, it does however mean that overall property prices should increase in 2018. On the flip side the help-to-buy scheme will see a considerable boost from this activity, securing funding for the programme up until 2021.
- The only way is up, for the wealthy
Exclusive multi-story apartments will continue to be a favourite amongst London’s wealthiest property clientele in 2018. Properties such as One Nice Elms (56 storeys), in SW8, will be at the top of the list of luxurious London residences, making it the tallest and most exclusive offering for private developments in the city.
- Buy-to-let will be in decline
The tougher lending criteria that came into effect last year looks set to continue in 2018. Landlords looking at buy-to-let mortgages will face restrictions imposed by lenders, levelling the playing field with first-time buyers. The Council of Mortgage Lenders predicts buy-to-let property purchases will fall to just under 80,000 in 2018. Down from highs of 120,000 during 2015-2017.
- Interest rates will stay low
The current Bank of England base rate sits at 0.5%, a rise last year from 0.25%. Another rise of 0.25% is expected later this year, which could add around £22 to a typical tracker mortgage of £175,000. However, experts predict that even if it does rise, it will hold at that level for quite some time. Those on tracker mortgages will see the effect immediately, but as most homeowners are on fixed repayments, this increase will most likely go unnoticed.
As always, the market can be unpredictable and linked strongly to our current economic and political standing on a day to day basis.
At CLR, we have our fingers firmly on the pulse of the city’s property Newswire. Meaning we can provide our clients the most recent and relevant property statistics to help them make the best decisions about their relocation.
Talk to our consultants today to find out how we can help move your talent.