Having just had an interest rate hike late in 2017, we’ve also seen property sales slowing, as well as more political and economic uncertainty ahead. On the face of it, the 2018 housing market doesn’t look too good. But while no one can accurately predict what will happen, it’s not all bad news, especially for first-time buyers and tenants.
It’s been a volatile time for the housing market for the last 18 months or so. With the average annual spend of every household down, people are feeling the pinch, and that does have a knock-on effect to the housing market in general. But among the inevitable gloomy predictions, we’ve hooked out some good, positive nuggets that should bring a sigh of relief to a lot of renters and buyers.
Though rental prices for tenants have increased markedly over recent years, we’re now seeing them stall, with the average UK rent rising by less than 1% in 2017. And in London, rent prices actually fell. So while there’s a question mark over inflation and money in people’s pockets, rental increases should be few and far between across 2018.
The Government are putting together a scheme that will help rental payments appear on a tenant’s official credit record. This is still very much in its early stages but the Government believes having rental payments included on a credit report will help first-time buyers in mortgage applications. This will also be beneficial to landlords as they’ll be able to see if a potential new tenant is reliable.
We had a hike in interest rates late last year, and we’ll probably see another one before spring is over. Yes, it’s another rise, taking the BoE base rate to 0.75%, but it’s still low overall. However, it should see a typical tracker mortgage rise by only a very small amount. But with many homeowners on a fixed rate mortgage, it will probably slip by unnoticed. And, with the economy faltering, it’s unlikely we’ll see any more hikes in 2018.
Over 200,000 brand new homes came onto the market in 2016-17 which is up by 20% on the previous year. Sounds good, but that number is still way off the Government’s own target of 300,000. Construction should pick up apace with the additional £10bn of Help To Buy funding that’s been made available for first-time buyers.
In a slew of uncharacteristically supportive measures for the housing market in last November’s budget, the Government scrapped stamp duty on all homes up to £300,000 bought by first-time buyers. This could save most of them up to £5,000. However, the Office for Budget Responsibility claims this, together with the market in general, could have an effect on house prices overall, causing a 0.3% increase across 2018, which is obviously good news for existing property owners if they’re looking to sell.
So despite the overall housing market remaining unsettled, there are some good news stories that will help people rent, buy and sell in 2018.
If you need any further information when it comes to buying, selling or renting your home, give one of the Silverman Black team a call today on 0208 773 2929. We’ll answer any questions you have and give you the help you need for your property.