Richard Butler Creagh
The Future of the UK Property Market
House price growth is likely to suffer a halt this year as increase in interest rate and Brexit are set to put brakes on the UK property market. Many have considered last year’s performance to be quite lacklustre and many homeowners and people who are looking to sell are advised to expect this year to be subdued and underwhelming. Many leading commentators have predicted that the house prices in the country this year will likely stay flat or will rise by just 1%.
However, the prognosis is not looking any brighter for the capital too. According to Savills, while London has experienced a growth of 70% on house price for the past decade, it is expected to experience a more downbeat year. A number of economists are also predicting that London property prices are most likely going to be in the negative territory.
Many commentators are putting the average price growth in the UK to be about 1% for this year. This would mean that property values are going to fall in real terms. Nationwide indicated that property values are likely going to be flat this year with a marginal gain 1%. Meanwhile, Halifax is predicting that the growth range for the UK property market this year is likely going to fall around 0% to 3%.
A Reuters poll involving 18 specialists in the housing market revealed that nationally, property prices are expected to rise by 1.3%. However, it further echoed the dismal figures for London where it is predicted that property prices in the capital will fall by 0.3%.
It is notable that much of the forecast reflects some really gloomy figures. However, these predictions are expected to be welcomed by the increasing number of first-time property buyers. Economists have also predicted that there is a range of factors that will likely weigh in the price growth for houses this year. The continuing political and economic uncertainty when the country is going to leave the EU, along with the increase in the interest rate as a result of the base rate hike last year, weak confidence among consumers as well as the issues on the affordability of mortgages can become brakes on the property market.
Still, shortages of properties that are being put up for sale as well as the house building being in such a low are likely to help support the property price. The abolition of the stamp duty for those homes valued up to £300,000 purchased by first-time buyers can also help provide some much-needed boost for those that are hoping to get on the property ladder as long as it will not cause the property values to get pushed up.
Brexit still remains as the biggest cloud over the nation’s property market this year, along with the implications it will likely have to personal finances and the economy in general. The developments convening Brexit are expected to be important. However, at this point, they are still quite hard to foresee.
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