It has been a difficult year for the UK’s property market, with the effects of a raft of new rules introduced over the past couple of years continuing to take their toll on house prices.
Yep: this year homeowners and landlords have been forced to grapple with the after-effects of regulations forcing landlords to shoulder the burden of costs when signing up new tenants, hiking stamp duty on top-end properties and slashing relief on mortgage interest repayments.
What about next year? Here’s what the experts think.
1. House prices will grow
Confidence in UK property has fallen to a five-year low, according to figures by Halifax – but the good news is that experts are predicting house prices will grow, albeit at a fairly modest rate compared with what we have become used to. Both JLL and Savills are reckoning on a one per cent rise in UK house prices next year, according to their forecasts.
2. But London will be the biggest let-down
Having outstripped the rest of the UK by a country mile in the immediate aftermath of the downturn, house price growth in the capital will level out for the next couple of years, experts say. Savills predicts a two per cent fall in 2018, followed by flat growth in 2019, while JLL predicts flat growth in 2018, followed by a 0.5 per cent rise in 2019.
3. Actually, it’s more of a tale of two cities
Ok, so everyone can agree prices in the capital will fall next year. But not everywhere in the capital will suffer: a forecast by KPMG has found in the next three years, prices in Hackney will rise more than five per cent. Westminster follows, with growth of 4.3 per cent, and Lewisham, where prices are expected to rise 4.1 per cent. At the bottom of the ranking is Richmond, where prices will rise just 1.7 per cent in the three years to 2020.
4. Expect more discounting
Data by Rightmove has shown more than a third of homes listed on its portal have had their prices cut, the highest proportion of discounted properties on sale in the autumn in five years. But it has suggested that doesn’t go far enough – saying that sellers are being “too optimistic” with their reductions, and should consider something more dramatic.
5. Beware a hard Brexit
Forecasts are all well and good when you know what’s ahead, but the market faces unusually high threat levels, even by recent standards. In its UK Housing Market Forecast, Knight Frank said the biggest threat to the market was an unfavourable Brexit deal, or one which leaves the UK with prolonged uncertainty past 2019. “As well as wider economic implications, the lack of a deal could impact London’s status as a global financial centre,” it said.
Source: City A.M.