UK property market
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The UK is one of just three countries likely to see no house price growth this year, according to a report by credit agency Fitch Ratings.

The report looked at 22 countries and said growth is likely to slow in most markets as the prospect of higher interest rates pushes up mortgage costs. However, only Norway, Greece and the UK are expected not to see price rises this year.

Fitch said the UK market would be flat in 2018 as high prices, low income growth and the weakness in the financial sector post-Brexit would lead to small falls in house prices in London and the southeast, while the regions would remain stable. It added that the impact of buy-to-let (BTL) changes including lower tax deductibility of rental income would also hit UK prices.

Suzanne Albers, senior director, structured finance at Fitch Ratings, said: “Arrears are at very low levels in most markets. They will only move in one direction as mortgage rates rise slowly due to higher policy rates and more expensive bank funding from the gradual unwinding of quantitative easing.”

Long-term fixed-rate loans are less exposed to increasing rates, but fewer re-financings mean lower lending volumes, so lenders may relax their borrowing criteria to boost volumes, subject to regulatory limits.

The report reflects the recent weakness in the UK housing market. The most recent Halifax report showed weakness in London, with growth slowing in the rest of the country.

Source: Your Money

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