HOW WILL THE UK PROPERTY MARKET PERFORM IN 2017? “side-valuation-button"

20 Dec 2016

HOW WILL THE UK PROPERTY MARKET PERFORM IN 2017?

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As the year draws to an end, we can look back with certainty and say that 2016 was momentous.

Portugal were crowned the European champions, Team GB set an Olympic record in Rio winning an awesome total of 67 medals, the British people voted in favour of Brexit, we have a new Prime Minister and government in office, Donald Trump is the new President-elect of the United States and Angelina and Brad announced they’re getting divorced. Oh what an eventful year it’s been!

Let’s look back at 2016

It’s been a spikey and unsettling year for the UK property market due to a number of factors, including the Brexit vote.

Stamp Duty

We saw a surge in activity during Q1 as investors pushed for transactions to complete before the additional 3% stamp duty hike on second homes came into effect in April. It was inevitable that we would see enquiry levels drop off going into Q2 but landlord confidence is returning following the post-stamp duty lull with Rightmove recently reporting a 30% jump in buy-to-let investor enquiries since May.

Brexit

Prior to the Brexit vote, the media bombarded us with alarming headlines claiming that “house prices could crash”. Immediately following the vote we were hearing that the FTSE 100 and Sterling had plummeted, economic experts were forecasting a “long and deep recession” and everyone was in panic mode.

A few months on and the dust has settled, house prices haven’t crashed, “the housing market is still alive and active” and confidence is returning. The UK economy remains resilient, in the short term at least, and the panic we saw earlier in the year has subsided and businesses and consumers are feeling more positive.

Looking ahead to 2017…

Confidence is the biggest driver of the property market and buyers and sellers need to feel assured before they make a decision about their biggest financial asset. The triggering of Article 50 is likely to cause more turmoil and uncertainty, but it won’t change the underlying fundamentals:

  • People still have to move for varying reasons be it downsizing, upsizing, schools, work, separation, etc.
  • There is a chronic shortage of new homes and the overall lack of supply shows no signs of easing for many years to come.
  • Property has and will always be an attractive source of investment.
Stamp Duty not Brexit will continue to slow the top end of the market but we believe the overall performance will be pretty similar to 2016. Prices will continue to rise but at lower levels than in recent years and as long as people’s expectations are managed with good, honest and sensible advice the outlook for 2017 remains positive.

The property market is driven by demand and it is clear that demand for housing remains strong. The focus needs to remain on building more new homes and addressing the housing shortage.

Will interest rates rise?

The Bank of England has forecast that inflation will be at around 3% by the end of 2017 and in a bid to curb this; there is a strong chance that interest rates will go up by 0.75% at the end of next year.

With 25 years’ experience in the local property market, we are committed to helping you move. If you are thinking of selling or considering renting your property, or if you are simply seeking some advice, we would love to help. Contact the team at your local branch or pop along and speak to one of our property experts in person and discover a refreshingly different approach to marketing your home.

We look forward to hearing from you.



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