New year resolutions may not be as trendy as they once were but new year predictions will never fall out of fashion. And the message that seems to be coming through is that 2017 will be a ‘good time to buy’, as the house prices will rise at a much slower rate, according to this year’s forecasts.
These predictions have been influenced by two significant events that occurred in the housing market in 2016: Changes in stamp duty and the EU referendum result, with the shockwave of the latter to certainly linger into 2017.
In the world of bricks and mortar, one of the most important sources is the Halifax UK Housing Market Outlook, which this year predicts a slowdown in house price rises comparing to an average of 10% in March 2016. Now the industry agrees that 2016 has seen house prices rise by a bit over 6 per cent nationally and Halifax prediction on this will be a 1-4 per cent rise by the end of 2017.
Halifax’s prediction is in line with most other leading forecasters. Nationwide said it is expecting a gain of “around 2%” in 2017, while surveyors’ body RICS has plumped for 3%. Countrywide, the UK’s largest estate agency, also predicts a 1% fall in 2017, citing Brexit-fuelled uncertainty and higher inflation.
The residential housing market in the UK finished 2016 positively, with prices in the final quarter of the year being 2.5% higher than in the previous quarter taking the annual growth to 6.5%. Saying that, slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017; Halifax housing economist Martin Ellis believes. “The marginal increase this year will be due to an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low-interest rates”, he adds.
Wellesley believes there are set to be a lot of positives for the housing markets in 2017, despite further economic uncertainty. The new climate will provide new opportunities for us to support experienced property developer SME’s and the intermediary community in finding finance to build new homes and a better living Britain, over this year and the years that will follow.