The UK property market has seen some extremely uncertain times over the last few years and at Andell Property, we are hopeful that 2018 will be a more positive year.
There are many factors that contribute to the health of the housing market but here are the ones that we believe will positively influence it in 2018;
1. More Homeowners Moving
The number of homeowners moving house is at the highest level in 10 years, according to analysis by Lloyds Bank, with an increase of 2pc to an estimated 370,300 last year, up from 361,300 in 2016.
Andrew Mason of Lloyds Bank, said, “We’ve seen a slight increase in the number of home-movers following a weak 2016. This could be down to low mortgage rates, rising house prices and high employment levels. House price increases will have boosted equity levels for many home owners, enabling movement along the housing ladder. For the first time, home-movers are choosing to pay an average deposit of over £100,000, with Londoners putting down nearly double this.”
2. A Rise in House Prices
There is room for optimism in 2018 with Rightmove predicting that house prices across England and Wales will rise by 1%. Sustainable house price growth is always a positive stimulus on the housing market.
The forecast indicates price growth in the lower and middle sectors of the market is set to continue in 2018, with an average growth of 3% for typical first-time-buyer homes and 2% for second-stepper properties.
3. Stable Interest Rates
Most pundits forecast a 0.25% rise in spring 2018 but with over 50% of borrowers on fixed rate mortgages, this wouldn’t have a particularly large or immediate effect.
The slowdown in the UK economy indicates that further rate rises are unlikely in 2018 so the low cost of borrowing should continue to be a positive influence on the housing market.
4. Increased House Building
The Government believes that “the only sustainable way of making housing more affordable in the long term is to build more homes in the right places” and it is trying hard to encourage new home building with a 2018 target of 300,000.
There are signs that construction activity is picking up which is one of the main precursors to a reviving housing market.
5. Buy-to-Let Market
Lending for buy-to-let mortgages is reducing as a result of rising taxes and tougher lending criteria. Therefore, the balance of power is now moving towards homebuyers rather than property investors. Again, having a largely positive influence on the housing market as a whole.
6. New Stamp Duty Rates
The abolished stamp duty for all properties up to £300,000 bought by first-time buyers should encourage more first-time buyers to take the leap in 2018.
7. Help to Buy Scheme
The Help to Buy Equity Loan scheme which offers a five-year loan of up to 40 per cent in London on new build homes costing £600,000 or less, was scheduled to close in 2020.
Last month, Theresa May promised an extra £10 billion to extend the scheme until 2021 which was confirmed in the Budget.
8. Rental Properties
The Government has put buy-to-let landlords on the back foot with its three per cent stamp duty surcharge. This should give first-time-buyers an extra edge in buying their first home. As more homes become available for sale again, this should help fill the ever-increasing demand of first-time buyers across the UK.
9. London Developments
The outlook for London is predicted to lag behind the rest of the country. But, with the 56 storeys of One Nine Elms and the 67 storeys of the Spire in Docklands there will be a lot of ‘High-End’ property entering the capital’s skyline from 2018.
10. Latent Demand
In 2017, many estate agents reported that buyers were ‘on hold’ with finding their next property. But now with the atmosphere changing once again and more properties becoming available for sale, we expect that there will be a significant increase in house-moving within 2018.
After what has been quite an unpredictable market for some time now, confidence appears to be returning once again to the UK housing market. In our opinion, this uncertainty has been largely caused by the rising cost of moving home and as a direct knock-on effect from Brexit. Whilst this has previously been a more worrying issue, we believe that together with new government support including the new Stamp Duty relief for first-time buyers, Government backed schemes such as the proposed extension of The Help-to-Buy scheme and with the inevitable increase in buyer demand, 2018 is all set to be a positive year for the UK housing market.