UK Property Trends 2018
The UK’s housing market is set for a year that will see numerous effects from new legislation such as the abolition of house duty and the new help-to-buy scheme.
2018 is also tipped to be the year where the government will introduce new measures such as a ban on letting agency fees. So what will this mean for potential home buyers and property investors for the remainder of the year?
A drop in house prices?
Economic uncertainties surrounding Brexit and fears of an interest rate rise have led to many headlines suggesting that house prices will fall in 2018. We have already seen how house price growth has slowed in areas such as London during the final months of 2017, and this could roll out to many well-performing regions such as Bristol and the south-west.
Much of this will depend on whether the predicted 0.25% increase in interest rates will arrive later this spring. Whilst many homeowners who are on fixed rate mortgages will be unaffected, it’s expected that this move could significantly influence the market with the UK average price growth being predicted to stay at a sluggish rate of 1% for 2018.
A home-building boom
Our report on UK property trends for 2017 revealed that the government was setting aside £1.2 million for land to build homes. The chancellor, Phillip Hammond, has also stated that there are plans to build over 300,000 houses each year.
It remains to be seen whether the homebuilding sector will enjoy the levels of productivity enjoyed before the financial crash of 2008/9. But it looks like UK first-time buyers will enjoy preferential treatment in accessing these new homes thanks to rising taxes and harsher lending criteria hitting any potential property speculators.
Boost for first-time buyers
With the removal of stamp duty and the benefit of relatively cheap mortgages, it looks like first-time buyers are set for a good year in 2018. Although the potential interest-rate hike might affect those considering a tracker mortgage, it’s thought that it is the overall climate of economic uncertainty that’s most likely to stop people buying their first home.
The abolition of stamp duty is thought to be saving many first-time buyers as much as £5,000, and whilst this might nudge up prices in the short-term, we can expect to see some interesting home buying trends as people avoid London, and instead head to in-demand locations such as Cambridge, Oxford and Milton Keynes.
Good news for tenants
Whilst there is plenty of uncertainty over the housing market in the face of Brexit, it looks like landlords will be unable to force tenants to pay much more in 2018.
With stagnating wage levels, and an expected ban on letting agency fees due to arrive at some point this year, there are signs that UK rents will rise less than the feeble 1% of last year.
So although there will be many property speculators lamenting the sluggish UK housing market, for tenants, 2018 looks to be a good year.
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