Property Market Insight: What To Watch Out For - UK Property Market Prediction 2018
27th December 2017
The new year looms over us and the rate in which house prices are rising is slowing; experts say the property market will "judder to a halt" in 2018 because of a mix of Brexit and rising interest rates and, at best, we'll see a rise of 3% (acording to Halifax) on average across the country with the exception of London, in which case, it is predicted that property prices will fall by up to 0.3% otherwise, the property market will stay flat. It is also suggested, however, that with the development of the North and continued investment into the "Northern Power House", property prices in the North have a fair chance of continuing to boom.
With house prices rising on average of over 4.6% across the country per year for the last 6 years, according to RightMove, homeowners have had a fantastic opportunity to cash in on large capital gains. However, in the upcoming few years, we predict the housing market will begin to slump and possibly even crash in 2020 as house prices begin to reach unaffordable values for first-time buyers, even with government Help-to-Buy schemes. The quality of new-build residential estates is falling and frankly, house prices are becoming unworthy of our investment as many choose to rent.
We are launching our business at what may be the tipping point of high-value homes and this is the exact reason we have stepped into the market because we know that, in just a couple of years time, when your value to loan ratio becomes likely to fall into negative equity, which will be a very real risk in the current and short-term future economic climate, you won't turn to selling your home. After all, why would you want to sell your home knowing you will likely still be in debt should the property market crash? History tells us the market will recover exponentially but we're preparing ourselves for that window where buying a house seems like an attractive option based on cost once again and, for homeowners who will be unable to afford to sell, we will be there to help you to manage your investment through the rough times ahead whilst ensuring it is still worth the mortgage repayments, council tax and upkeep costs. In our opinion, now is a great time to sell and an even better time to be a landlord.
It might not be all doom and gloom for house prices, mind you. There's a shortage of land to build on and I'm not sure if you've noticed but England isn't getting any bigger, a country isn't like a Semi-detached that you can erect an extension onto the rear of and even if we could, where would we put it? The planning alone... Then again, Dubai managed it... This shortage of land could inflate house prices in upcoming towns and cities, especially in the North as mentioned.
Perhaps the biggest cloud hovering over the property market next year is Brexit, and what it could mean for people’s personal finances and the wider economy, not just house prices. However, here at Harry Albert Letting & Estates, we're not sure 2018 is going to be anything but a run-up to what is to come in 2019 and 2020. In 2018; interest rates are expected to remain low though there is expected to be a rate rise in Spring which we don't expect to be by any more than another 0.25%, the rate in which new homes are built will continue to accelerate (this year, the UK built 20% more homes than it did in 2016), abolition of Stamp Duty for first time buyers will see a massive number of first-time buyers flood the market which may actually increase house prices and this may mean landlords lose out (but we can help minimise void periods maximise returns) in the short term as people leave rented accommodation to move into their own homes.
This is all predictions though, nothing more than educated guesswork, no matter what we say or any other property experts, for that matter; predicting the future is like predicting the lottery though we can have a more educated guess, I suppose. We could be wrong, so could the Halifax, RightMove, Zoopla and our fellow letting and estate agency friends who feel the same way but either way, you can be sure that Harry Albert Lettings & Estates will be on the ball, staying on top of industry updates, property trends and regulatory info so that when you do decide to either sell, buy or rent out your property, we will certainly be the right people to turn to whether you want to employ our services or just take advantage of some free, confidential advice.
You should be aware, however, these predictions are based on the property market as we see it, again, predicting the future isn't an easy task and a whole range of events could occur which may change our predictions for better or for worse, however, regarding our prediction of the 2020 Property Crash in the UK, we have been following the property house prices trend for several years and it certainly does look like history is repeating itself in terms of how house prices rise and fall relative to the consequences of unforeseen economic events.
You should not take these predictions as a reason for or against taking your planned next steps regarding your property, however, it is important to bear in mind what could negatively impact any plans you may have to sell over the next three to five years. As we mentioned earlier, we are happy to help and can offer a range of services and solutions as well as provide you with free advice when it comes to deciding on how to best achieve your property goals.