Growth in UK House Price to Come to a Halt in 2018, according to Experts

Growth in UK House Price to Come to a Halt in 2018, according to Experts

2017 has seen a lot go down in the property market which many experts have termed to be a chain of events that may lead to a downhill trajectory in 2018.

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Growth in UK house prices looks set to tumble to stagnation or manage to dodge an above-inflation rise at best, as the prospects of increasing interest rates, brexit, low income rates and stringent reforms continue to overshadow the property market.

Experts have informed homeowners and people looking to sell off their properties in the months ahead to look forward to a dissapointing and repressed market in 2018. Leading UK property commentators are predicting house prices will either see a growth rate of 1% or so, but that it prominently looks likely to stay flat.

Most of the reasons include certain measures undertaken by government from 2016-2017 to loosen the hold of professional buy-to-let landlords on the market, the political uncertainties haunting the country’s economy, the lingering brexit fears, and interest rates looking to soar.

In 2016, a new stamp duty Land tax was introduced for second home purchases to discourage professional landlords from dominating the market. The move has seen a reduction in home sales since that year. In 2017, another measure to curtail landlords came in the form of tax reforms that would prohibit them from offsetting their mortgage tax. Then in September of the same year (2017), new stringent loan rules were introduced to tighten the borrowing process for buy-to-let investors.

According to development finance experts, UK Property Finance,  “The measures put in place on mortgage loans may see already established landlords stall on investing further into the market, but coupled with the stringent tax reforms, some may leave the market entirely. But landlords unwilling to give up just yet may take up other forms of innovative means to finance their investment as we have seen the UK alternative finance markets growing over the years”.

An uncertain turn of events still await the property market as political and economic concerns continue to build up leading to 2019, when Brexit is due to take effect. Also, the prospect of additional interest rates following the hike from 0.25% to 0.5% in November 2017, in the coming months will factor in the cessation of growth in the property market.

In its 2018 forecast, the Royal Institute of Chartered Surveyors (RICS) predicted that growth in UK house prices is “set to come to halt” during the course of the coming months. The forecast further reported that “House prices across the UK will have experienced no changes at all as a whole, come the end of 2018”.

Although the chancellor introduced a new stamp duty reform to favour first-time buyers alongside other government measures targeted at increasing the UK house supply by 300,000 new homes year on year by the middle of 2020 and address other property market issues, RICS have said these new measures will have little or no bearing on the course the market has already taken.

For London properties, things are looking gloomier as economists continue to forecast a reduction of house prices in the capital to the negative region in 2018. RICS further confirms that the negative outlook for inner London could also spread wider to the south-east with that region looking to be hit by “modest price declines”.

Some predictors however, are touting the market for growth over the course of 2018. According to Hometrack, the property website, the UK as a whole will experience a market growth in the region of 3% in 2018, with house prices in the UK’s top 20 cities – which account for over a third of the housing stock of the UK – looking to enjoy a combined 5% growth. It further states that London will likely counter this trend, but believes prices in the capital will increase by 1% unlike other forecasters.

Other positives to look forward to in 2018 is the boost for the property market’s new comers looking to enjoy the scraping off of stamp duty on purchases up to £300,000, tenants looking to exploit and enjoy the introduction of the ban on letting agency fees coming in in 2018, and, of course, landlords looking to cash in if the Office of Budget Responsibility’s forecast of property price hike by 0.3% comes to fruition.

2017 has seen a lot go down in the property market which many experts have termed to be a chain of events that may lead to a downhill trajectory in 2018.

Growth in UK house prices looks set to tumble to stagnation or manage to dodge an above-inflation rise at best, as the prospects of increasing interest rates, brexit, low income rates and stringent reforms continue to overshadow the property market.
Experts have informed homeowners and people looking to sell off their properties in the months ahead to look forward to a dissapointing and repressed market in 2018. Leading UK property commentators are predicting house prices will either see a growth rate of 1% or so, but that it prominently looks likely to stay flat.
Most of the reasons include certain measures undertaken by government from 2016-2017 to loosen the hold of professional buy-to-let landlords on the market, the political uncertainties haunting the country’s economy, the lingering brexit fears, and interest rates looking to soar.
In 2016, a new stamp duty Land tax was introduced for second home purchases to discourage professional landlords from dominating the market. The move has seen a reduction in home sales since that year. In 2017, another measure to curtail landlords came in the form of tax reforms that would prohibit them from offsetting their mortgage tax. Then in September of the same year (2017), new stringent loan rules were introduced to tighten the borrowing process for buy-to-let investors.
According to development finance experts, UK Property Finance, “The measures put in place on mortgage loans may see already established landlords stall on investing further into the market, but coupled with the stringent tax reforms, some may leave the market entirely. But landlords unwilling to give up just yet may take up other forms of innovative means to finance their investment as we have seen the UK alternative finance markets growing over the years”.
An uncertain turn of events still await the property market as political and economic concerns continue to build up leading to 2019, when Brexit is due to take effect. Also, the prospect of additional interest rates following the hike from 0.25% to 0.5% in November 2017, in the coming months will factor in the cessation of growth in the property market.
In its 2018 forecast, the Royal Institute of Chartered Surveyors (RICS) predicted that growth in UK house prices is “set to come to halt” during the course of the coming months. The forecast further reported that “House prices across the UK will have experienced no changes at all as a whole, come the end of 2018”.
Although the chancellor introduced a new stamp duty reform to favour first-time buyers alongside other government measures targeted at increasing the UK house supply by 300,000 new homes year on year by the middle of 2020 and address other property market issues, RICS have said these new measures will have little or no bearing on the course the market has already taken.
For London properties, things are looking gloomier as economists continue to forecast a reduction of house prices in the capital to the negative region in 2018. RICS further confirms that the negative outlook for inner London could also spread wider to the south-east with that region looking to be hit by “modest price declines”.
Some predictors however, are touting the market for growth over the course of 2018. According to Hometrack, the property website, the UK as a whole will experience a market growth in the region of 3% in 2018, with house prices in the UK’s top 20 cities – which account for over a third of the housing stock of the UK – looking to enjoy a combined 5% growth. It further states that London will likely counter this trend, but believes prices in the capital will increase by 1% unlike other forecasters.
Other positives to look forward to in 2018 is the boost for the property market’s new comers looking to enjoy the scraping off of stamp duty on purchases up to £300,000, tenants looking to exploit and enjoy the introduction of the ban on letting agency fees coming in in 2018, and, of course, landlords looking to cash in if the Office of Budget Responsibility’s forecast of property price hike by 0.3% comes to fruition.

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