With the New Year upon us, attention turns to the year ahead with many already asking us for property price predictions for 2018.
Whilst no-one has a crystal ball, there are some early indications that 2018 could see some growth after a relatively flat 2017.
So, what will house prices be doing in the year ahead? In this guide, we bring you the opinions of the UK’s leading property professionals so you can decide for yourself.
Did Property Prices Increase in 2017?
Despite a lot of negative press and some concerns over the impact of Brexit, particualtry in the wake of the controversial snap-election, house prices in 2017 remained stable. In fact, the average price of a home in England actually increased by around 2.45% (according to the Nationwide) or 3.66% (according to the Halifax).
Factors Affecting House Prices 2018
There are two main drivers behind the slowdown in the growth of property prices; reduced spending power and caution amidst the changing economic landscape amidst Brexit negotiations.
- Inflation levels have outpaced wage growth in the last 12 months which has affected spending power. This reduction has had an affect on other areas including retail and leisure spending plus borrowing.
- The property market is expected to remain cautious around the impact of Brexit as the details of the UK’s departure from the EU unfold.
What are the Experts’ Property Price Predictions?
As ever, industry opinion is divided with some anticipating more growth (albeit slight), others predicting a slump and, as always, those that are on the fence who see a flat year ahead.
Some private developers are predicting a rise of 2-3% with some dips along the way as the market responds to news of Brexit.
The view is supported by Halifax who are playing a cautious game with their predictions, suggesting an overall increase in property prices by 0-3%.
A recent poll conducted by Reuters asked the opinion of more than 20 housing market specialists for their UK property price predictions for 2018 and the overall results showed that a small growth of 1.3% was expected nationally.
As ever, the property markets experience different trends in different regions and the consensus of opinion is that London and the South of England can see more moderate increases, if not a period of price drops and rises which will result in an overall flatlining.
Conversely, property prices in the North are expected to enjoy more consistent growth as earnings, relative to the cost of housing, make housing more affordable.
The slow down in growth is partly being attributed to the lack of confidence that buyers have in the value of their home with more than a third of homes on the market reducing their asking prices in a bid to sell.
The Royal Institute of Charters Surveyors (RICS) paints a much bleaker picture and expects 2018 to see property prices grind to a halt.
The picture is made less rosy when you consider their opinion that the national average will offset weaker markets in the South and London who will likely see a fall in property values.
RICS members do not believe that the recent cut in stamp duty for first time buyers will not be enough to stimulate the market with affordability still being a barrier for many; again, particularly in the South.
Property market analysts, Hometrack, suggest that the UK can expect to see some encouraging growth in prices in regional cities like Manchester, Birmingham and Glasgow whilst London will see a period of stagnation.
Affordability is the key driver behind the opinion with London having experienced unsustainable growth over the last decade. House prices in the capital have leapt 70% since 2009 with wages falling far short of this increase. The bottom line with the price for London homes is that they are no longer within reach of the people who demand them and something has to shift. 2018 could well prove the turning point that the property market in London is realigned but don’t expect a major sea change.
Property Price Predictions for 2018: Summary
Forecasting for any markets is a gamble and there are no clear indicators pointing to any particular school of thought, but the general consensus of opinion is one of low growth outside of London and moderate growth for regional cities.
However 2018 pans out for the property markets, Property Assistant can help homeowners achieve the best price for their home and find their next dream property. If you would like to find out more about the markets in your area then contact us today on 0118 912 2370.
Featured image via Flickr.