Forecasted Growth for 2018
With price growth forecasted for the lower and middle sectors of the market, experts are seeing an average growth of 3% for typical first-time-buyer homes and 2% for second-stepper properties as the market continues to strengthen from previous lows. This growth comes as a surprise to some investors who have seen upper tier homes in more affluent parts of London predicted to fall an average of 2 percent over the next 12 months. Combined with the 3 percent growth for lower market homes, we see an average of 1 percent growth overall for 2018.
That little growth may not seem like a lot, especially when compared to previous years including 2017’s 1.2%, but in a slow market, growth is still growth and that means profit.
A Two-Tier Market
Now, let’s take a look at that two-tier housing market I mentioned earlier. What is the reason behind it and why are 2018’s growth predictions so subdued?
First, we have the ongoing shortage of suitable properties for sale. This is in areas where demand is high and prices are pushed higher as new sellers look to take advantage of the strong seller’s market. Now, combine this with historically cheap mortgage rates and you have a market that is slightly unstable due to its own strength.
Secondly, with interest rates low, overall affordability stretched due to subdued wage growth, and reduced numbers of high-end movers, particularly in London and the South East, another property price boom isn’t likely to happen.
Yet, despite all the geo-political factors of the last twelve months, the UK property market remains in good health. If we see a steady market with subdued growth in 2018, existing home owners could see the value of their asset hold, and new home buyers will have an opportunity to take advantage of the slow market and purchase more of a property than they had expected. We will continue to look forward to 2018 and watch as the London property market grows slowly and steadily and keep you updated and informed right here on our blog.
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