There are many property ‘analysts, property writers and expert consultants’ who are never afraid of predicting how the residential property market will perform at this time of a new year.
What the last 26 years has taught me is that any predictions revolve around three key issues - property, politics and economics. This is simply because all three indicators impact directly on the property market.
As we prepare for 2018, we believe the next 12 months is probably more multifarious than ever.
To predict with some certainty you would need the ‘inside track’ as to what the Government and the Bank of England policies are likely to be, and, once informed, make a best guesstimate at the ramifications of these. An almost impossible task!
The likely conclusion is that the property market, from a buyers view point, is going to continue as is; somewhat lethargic and apathetic. Confidence is still a key factor in buyers and sellers minds and can influence much of the markets’ activities. A rise in interest rates, Brexit and the uncertainty of the outcome or simply general ‘doom and gloom’ is likely to have a massive impact on the property market, putting many off making vital decisions.
We don’t think this should be the case; the impact at this stage of the negotiations of Brexit is unknown and while there are many trade deals to be fleshed out, we believe in approaching life with optimism and the confidence to make key decisions about when to sell and buy or sell and rent.
There is plenty we do know, or can predict with confidence, that allows us to best estimate the future of the housing market. We have identified six key factors that should influence our forecasts and make accurate predictions in 2018.
- In the next 12 months there will be a lack of confidence over the likely contours of post-Brexit Britain. The Brexit negotiations will obviously impact the UK economy and, just as importantly, individual households’ wealth and financial security. While it will take time for the precise impact to become clear, this uncertainty will make buyers more cautious in the short term at least.
- Mortgage interest rates are predicted to rise in the UK over the next five years. The amounts that people will be able to afford to borrow will therefore be squeezed in an age of mortgage regulation. The dramatic cost of borrowing will create undue financial stress on households and rental prices will inevitably increase with a higher demand for rental properties.
- Buy-to-let investors in 2018 are already feeling the effect of the mortgage regulations that owner-occupiers have lived with since 2014. They already have to pay greater SDLT costs that are unlikely to change in the foreseeable future.
- The adjustment in house prices in London is likely to continue; this is because there has been much greater house price growth than in the rest of the country for the majority of the past decade. So, London is likely to be more price sensitive than the rest of the country by the factors above.
- In previous recessionary times, house price growth in the north of the country has been more robust, exceeding that in the south. In the past though, it was facilitated by a strong economy or relatively unhindered access to mortgages. It remains to be seen how these market conditions will affect this particular question.
- There continues to be a shortage of affordable houses being built of the right type in the right places throughout the UK to meet continued high demand. However, there seems to be an increased political desire to address this as highlighted by the chancellor in his November budget speech.
Here at Premier Property Search we have enjoyed working with some astounding clients during 2017, whether it was helping them find suitable rental homes or exceptional homes to acquire.
While it has not been the easiest of business years in the residential property sector; as a motivated and passionate independent property consultancy we pride ourselves on the highest level of personal service. We value and appreciate your constant support and engagement; we will never take anything for granted. So thank you and we hope 2018 is a good one for us all!