With 2018 upon us, we can look back on 2017 and say that it was lively.
Sir Mo Farah was voted British Sports Personality of the Year, Bitcoin’s popularity surged, Donald Trump took office as the 45th president of the United States, the US was treated to its first total solar eclipse for the first time in 99 years, Prince Harry got engaged to Megan Markle and Jodie Whittaker made her debut as the first female Dr Who!
It was an interesting year for the property market too…
Political issues dominated the media last year with the General Election in June, the uncertainty surrounding Brexit negotiations and Philip Hammond’s decision to abolish Stamp Duty for first-time buyers on properties worth less than £300,000 in November’s Autumn Budget. Despite all these factors, house prices remained stable with the exception of London where prices dropped.
How will house prices perform in 2018?
Rightmove is predicting that prices across England will rise by 1%, but there will be further decline in the capital.
Although this is a slower rate of growth than we’ve seen in previous years, it is steady considering that Brexit negotiations are set to continue into the first quarter of 2019, and the current state of our political climate is unstable, to say the least.
The continued growth of house prices is also supported by the shortage in housing supply. Demand continues to outstrip supply with the rate of new homes being built unlikely to meet the Government’s target to build 300,000 a year.
What about interest rates?
November saw the Bank of England base rate rise from 0.25% to 0.5% but this hasn’t significantly impacted the availability of low rate deals for residential mortgages, and some independent lenders are offering more attractive rates on buy to let mortgages too.
Trade body UK Finance has predicted that more first-time buyers will take advantage of competitive mortgage rates, combined with a continued trend for high levels of remortgaging which will help to sustain the market.
What’s the outlook for the rental market?
Many of the factors that leave people with doubts and concerns over the property market only raise demand in the rental market, which means that Brexit, increased interest rates, house prices and a lack of supply will all play a part in increasing demand from tenants.
In addition, landlords have been hit by a raft of changes over the last couple of years that have affected their income, in particular the extra 3% Stamp Duty imposed on people buying a second or additional property leaving many investors reluctant to increase their portfolios.
Tax changes have also led to much slower levels of new investment in the buy to let sector which is tightening supply and supporting rents.
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With all of these factors having a strong influence on the market, Hometrack expect rents to rise by around 2% in 2018.
We are here to help you move in 2018
With over 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.