Throughout 2017, the housing market was a much talked about topic. During the Autumn 2017 budget, it was announced that stamp duty would be abolished for first time buyers. In addition to this, the amount of homes being built was a subject of conversation as well as the supposed targeting of landlords by the government. In a time of such economic uncertainty and with Brexit looming, it’s difficult to know if there’ll be any positive news for the housing market. As 2018 and begins, there are various predictions being made.
To being with, Halifax managing director Russell Galley has outlined that the growth of house prices is likely to remain low. By the end of 2018, overall prices should stay within a 0-3% range. As inflation increased throughout 2017, potential home buyers have less spending power because the lack of wage growth can’t compete. Furthermore, there is still a great deal of uncertainty regarding the outcome of the UK economy as 2018 develops. Housing prices in London could fall by 0.3%. During 2017, potential property owners began to steer clear of the capital to avoid high asking prices. Insight director at Hometrack Richard Donnell outlines that house prices in London have increased greatly by 70% since 2009.
As a result, the Midlands, Manchester and the North West have had an increase because asking prices are much more affordable relative to overall earnings. According to the property website Zoopla, more than a third of homes for sale had their asking prices reduced in November. Estate agents, Savills states that prices in these increasingly popular areas outside of London will eventually increase. It is likely to be the response to the rising numbers of property buyers outside of the capital. Furthermore, Savills emphasises further: ‘There is capacity for growth once we have greater clarity, but this will be constrained by rate rises and the corresponding ability to get mortgage debt, particularly in London and other higher value locations’.
The state of the housing market in 2018 is uncertain. The predictions thus far indicate that there needs to be yet more change to fully benefit potential home owners. Property buyers are completely aware of high asking prices in London, so they are moving elsewhere to get the best deal. If the capital wants to attract more buyers, then prices need to readjust to the current state of earnings.