The UK property market in 2018 – what can affect it?

Everyone wants to know how much their house is worth, it’s why every other website on the Internet has a calculator to help you work it out.

For many, their property is an investment for their retirement, so they need to know that it’s got healthy value in it and that there’s some room for growth, but for others, particularly first time buyers, the constant rise doesn’t help at all.

If you’re thinking of buying a house, you’ll need to get more deposit than ever before, but should you make the jump into property ownership or should you wait?

Some big announcements have been made in the past few years by a government hoping to appeal to young people with policies that will help them, and there are also economic factors that will influence decisions.

Here are a few, with our predictions on how they might pan out.

Stamp duty cut

This is a contentious issue.

Stamp duty for properties up to £300,000 and bought by first-time buyers was abolished.

This is estimated to help most buyers to the tune of £5,000 in savings, but the Office for Budget Responsibility predicts it will also increase prices by 0.3%.

It’s still a saving, however, as long as sellers don’t see it as a sly way to justify extra prices.

So far, this has failed to create any changes to the market, with sales not seeing any increase since it was introduced in the budget, but it might take a while for the effect to trickle through.

More houses are being built

Although the figures are confusing, we can see from the Government’s own data that there was an increase in 15% of new houses in the UK in 2016-2017.

It’s made up of a number of factors, including changing of use, conversion etc. but new build homes make up over 183 thousand.

That’s a big increase, and councils are being pressured to release even more land to build many more houses, so we should see even more coming on to the market.

More supply generally equals a softening of prices, and it should allow more first time buyers into the market.

There’s another side to this, too.

As the population grows, many older people are moving out of their homes and into retirement apartments, freeing up even more housing stock.

The future finally looks good for first-time buyers!

Interest rates are still low

In October 1989, the base interest rate was set at 14.875%.

Can you imagine paying today’s mortgage with those sort of rates?

With many people on trackers at one percent above base, it’s hard to imagine ever paying above 10%, but we did back then,

Some people are scared off by worries that it could happen again, but times are different, and it’s unlikely that any rate rises will be that sharp.

Certainly, given the current high rates of borrowing, it would be reckless and dangerous to consider increasing rates too much.

So is it a good time to buy?

This is a tough question to answer because it relies so much on personal circumstances and an understanding that we really don’t know what’s going to happen in the world next week, let alone in the next decade.

But, looking at how things are progressing, if you can afford it, and if you can get the right mortgage, it certainly seems that at the moment, the market is looking up for first-time buyers.


Quick reg (franc)