As we begin a new year, we reflect upon what has passed whilst turning our thoughts to what we might expect from the property market in 2018. The impact of Brexit concerns, the interest rate increase, and the Autumn Budget announcement are likely to continue to have widespread consequences on the growth of the market in 2018. Whilst the property market in Surrey is likely to remain stable, it is expected that the values of homes in London are likely to fall another 2% in 2018, following a 1.8% decline this year. This slump is indicative of the political and economic uncertainty of the times, with the effects usually felt in the capital first.
Whilst it is thought that 2018 will bring an assortment of pressures, both positive and negative, experts consider that the net result for the capital will be an overall slowing of house price growth, in keeping with the trends of previous years. Richard Stovold, Director of Seymour Burpham comments however that, ‘looking further afield, outside of London, there is room for optimism as average house prices across England and Wales are likely to grow by 1%. Whilst this might not seem like a significant change, it reflects the fact that the market is still growing at a stronger rate than previously expected.’
The Autumn Budget was good news for first-time buyers this year, as their deposits will now go further, which will enable them to more quickly step onto the property ladder. This is likely to encourage many to enter the property market, but will demand to begin to outstrip supply? The Office for Budget Responsibility has noted that anything that stimulates demand, without a corresponding increase in supply, will put an upward pressure on prices. Indeed, some sellers are already factoring the stamp duty tax break into their asking price. There are concerns therefore that this will cause less liquidity in the property market than the hopeful announcement initially suggested. Higher prices will benefit those who already own homes, but could cause some first-time
buyers to be priced out of the market.
For those with property portfolios, the buy-to-let market will remain a lucrative one. Although landlords have had more than enough to deal with over the past two years with changes to tax relief, the stamp duty surcharge on additional property, and tighter lending criteria, it is unlikely these are causing enough to abandon their property portfolios. They may alter their approach by reducing the number of additional properties they purchase and managing mortgage costs closely, but the buy-to-let market continues to be a sound investment.
Overall then it appears that just as in recent years, the outlook for the property market remains mixed. A steady market will continue to see growth in many areas, homeowners are likely to see their assets either hold or increase in value, whilst a break in rapidly increasing property prices will help boost the position of those trying to buy their first home.
The new year provides a great opportunity for you to get an up-to-date valuation of your home. We recommend kickstarting your year by arranging a personal and in-depth valuation with your local branch of Seymours. Our agents are trained to provide you with the best market appraisal available.
To book your free valuation, click here
or pop into your local branch.