What will influence the UK property market in 2018?

2018 Property Market

The Guardian Business indicates six features that could influence the UK property market in 2018, the expectation is a hint towards a more favourable year for first-time buyers and tenants.

1. Interest rates staying low

With a further 0.25% increase towards the end of Spring, the Bank of England base rate will amount to 0.75% . While this will add £22 to the typical £175,000 tracker mortgage, since the majority of borrowers are on fixed rates it is likely that this change will go unnoticed by most homeowners. While mortgages will remain relatively cheap, rising inflation will not make this a lighter burden.

2. More houses.

2016 – 2017 saw a 20% increase on the year before, with a total of 217,000 homes arriving fresh onto the market. Whilst this only brings the levels back to those seen before the financial crash, it nonetheless displays very positive signs. With prospective construction activity set to rise, the expectation is that housing supply will be less of a pressing issue than it previously has been.

2018 Property Market 2

3. First-time buyers gain upper hand.

An improvement for first-time buyers is anticipated for 2018 as lending for buy-to-let declines. Flash back to 2015 with 120,000 houses snapped up by landlords utilizing buy-to-let finance, this number is expected to fall to below 80,000 in 2018 according to the Council of Mortgage Lenders. A tax increase combined with a tighter lending criteria are swaying momentum towards home buyers rather than property speculators.

4. Stamp duty cut and help-to-buy boost.

Stamp duty has been abolished for all homes up to £300,000 bought by first-time buyers. The effect of this decision will be that four out of five first-time buyers could save up to £5000. However the downside of this initiative is that prices will rise in 2018 by 0.3%, according to the Office for Budget Responsibility. The help-to-buy scheme has also received a boost of £10bn which will provide financing until 2021, the benefit of this will be felt by first-time buyers, yet also developers.

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5. Tenants relief

2017 saw UK average rents rise by less than 1% and even falling in London. Given the pressures that salaries are under from inflation there is little expectation for real rent increases in 2018. The Government also insists that the ban on letting agency fees will arrive at some point in 2018, although there is no fixed date currently.

6. The rich ascending

2018 will see the impressive One Nine Elms’ 56 storeys climbing London’s skyline in SW8. It will feature luxurious private residences, a 50th floor sky lounge and 5-star hotel, with prices that started from £800,000 at launch. It will hold the title of the city’s highest residential tower only until 2020 when it will be overtaken by the completion of the Spire in Docklands.

Statistics and figures as of 26/12/17.