What does 2018 have in store for the housing market?

Tue 23 Jan 2018

After a year of Trump, Brexit negotiations, Stamp Duty changes, greater tenant rights and further taxation changes, the property market as a whole has proved to be incredibly resilient once again. As we look ahead to 2018, we hope that the market continues to hold its own when faced with continued the political and economic uncertainty, further regulatory changes and proposed gradual interest rate rises. Here’s our take on the year ahead for housing:

Transactions

Across the UK, the number of residential property transactions increased by 0.6% in November compared with the previous month, according to the latest HMRC statistics. 

In real terms, this was 104,200 housing transactions for November, which is up 7.1% on the corresponding month in 2016 on a seasonally adjusted basis.

There were 1,127,450 residential property transactions completed in 2017, on a seasonally adjusted basis, which suggests that the market is entering 2018 on a rather solid footing. 

Tim Lovett, MD at Lovett Sales & Lettings said: “In St Neots and West Cambs in general we’re finding the demand for homes to be extremely high still – when priced correctly of course! It’s the lack of new stock coming onto the market that continues to frustrate. Especially when you see mortgages are priced very competitively and we now have the chancellor’s Stamp Duty exemption for first-time buyers. However the early signs in early January lead me to believe we may see renewed activity at the entry level of the market over the coming months.”

Housebuilding

With the government consistently missing its housebuilding targets for as long as we can remember, Britain’s housing shortage has now reached crisis point, with the number of prospective buyers and renters dramatically outweighing the volume of homes on the market across most parts of the country – again something that from an anecdotal point of view we can absolutely vouch for.
The chancellor Philip Hammond acknowledged the growing problem in his recent Autumn Budget statement by making housing a primary issue and pledging to provide funds to support the construction of up to 300,000 new homes a year, in accordance with a recommendation made by the House of Lords Economic Affairs Committee in 2016.
We believe a significant number of the new homes built will be in our region, in particular as a part of the proposed ‘Oxbridge Corridor’ http://bit.ly/2DxrOsh. We’re already seeing new developments springing up locally, from Alconbury Weald and Brampton Park, to the huge new proposed communities at Northstowe and Wintringham Park.
David Hawkes, Sales Manager at Lovett Sales & Lettings is optimistic: “With the Chancellor addressing our housebuilding crisis with a further £44bn funding over the next five years providing support for SME’s, developing construction skills and modern methods of construction, we should start to see significant improvements in the number of houses built in 2018 and beyond,”.

House prices

The annual rate of house price growth sat around the 2-4% range throughout 2017 according to Nationwide, however experts believe the 2018 outlook to be much more bleak, with economic and political uncertainty still in the minds of the public.

Whilst the Prime Central London market is likely to continue to stagnate, the rest of the country, according to insiders in the industry, will plateau.

JLL however forecasts UK house price growth of 2.5% pa for the next five years, while a recent Reuters poll of 28 housing market specialists suggest that house prices will rise by 1.3% nationally in 2018 - all price projections for 2018 are below the existing rate of consumer price inflation.

Our opinion for the West Cambs region is far more positive than this. We feel the area will continue to boom, as more and more people from outside of the region consider relocating here. Furthermore, buy-to-let investors are aware that despite the recent legislation changes to the sector, our region can still offer annual yields between 4 – 6%. Far better than you’ll get putting your money in the bank!

Crystal ball

Making accurate and precise future predictions for any property market is ALWAYS difficult, and really requires the help of a crystal ball to be totally accurate.
This year is unfortunately no different, with several new mortgage restrictions and tax changes in the works, the multitude of potential Brexit outcomes, all of which will ultimately have an impact on the outlook for the housing market, including housebuilding levels, residential transactions and prices.
From a personal point of view, our MD is clear on what he would like to see from the Industry. “I’d like to see a reform in the existing house-buying procedure that puts more accountability on buyers and sellers, prior to exchange. I also feel an overhaul of the stamp duty rates are required to revive the market once more – especially around second homeownership and the buy-to-let market”
We’ll be keeping an eye on all the patterns, trends and key policy changes in our sector via the Blog page on our website, so keep it bookmarked!
https://www.lovettsalesandlettings.co.uk/articles

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