Factors Influencing the UK Property Market in 2018
The UK’s housing market could begin to look a touch brighter to first time buyers and tenants alike in 2018. Here’s why:
Interest rates will remain low
We are expecting to see a 0.25% hike in the late Spring, though this will probably go unnoticed by those on fixed mortgages, whilst those on tracker mortgages may see an increase of around £22 based on the typical £175,000 tracker mortgage. The weak economy means the market does not expect any further interest rate hikes over the year. Mortgages will remain cheap, though with inflation outpacing wage rises, it will still feel like a burden for the majority.
House building will rise
217,000 new houses were put on the market in 2016-17, a 20% increase on the year before. Though this brings the total back to levels seen before the financial crash and a long way short of the 300,000 target set by the government. If construction activity picks up, and “brexodus” migration numbers continue to fall then the supply side of the housing equation will be less than in previous years.
Stamp duty cut
Stamp duty has been abolished for properties up to £300,000 for first time buyers. First time buyers can now expect to save up to £5,000, however it has been predicted that house prices are likely to raise by 0.3% due to this. Meanwhile, the help to buy scheme has been given another £10bn boost, providing financing until 2021.
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