UK property market
Marijana No Comments

Certain changes are expected to hit the UK property market in 2018.

A 0.25 % increase is interest rates will tentatively occur in spring, which will increase the Bank of England’s base rate to 0.75%. This will increase a tracker mortgage of £175,000 by £22.

This raise will not affect all homeowners, given the fact that over half of all borrowers are on fixed rates.

The number of new homes being produced has increased, with 217,000 properties made available in 2016-17, which represents a 20% increase from the previous year. Although this accomplishment restores the total to levels seen prior to the financial crash, it is still lower than the government-issued target of 300,000.

A combination of reduced migration and increase in construction activity means that the housing supply will face less pressure than earlier.

The property market in 2018 will likely see more first-time buyers appear, along with a decrease in buy-to-let lending. In 2015 landlords acquired approximately 120,000 homes using buy-to-let financing. The Council of Mortgage Lenders anticipates that this number be under 80,000 in 2018. Higher taxes and stricter lending criteria are favouring the homebuyer instead of property speculators.

In the 2018 budget Chancellor Philip Hammond announced the elimination of stamp duty on properties valued up to £300,000 if they were bought by first-time buyers. Four out of five such buyers will save up to £5,000.

Some believe that the break on stamp duty, combined with the ongoing availability of Help to Buy, has created ideal conditions to buy a new home.

Successive years of rent increases probably means that landlords cannot raise their rates much further during the coming year. Last year London rents rose by less than 1%.

Salaries affected by inflation will also impact the property market in 2018, which is another reason why rates are not expected to go up this during 2018.

The ban on letting agency fees will also make tenants happy. Although there is no definitive date that the ban takes effect, the Government has stated that it will arrive this year.

Source: CRL

Leave a Reply

Your email address will not be published. Required fields are marked *