British Property Award Winner 2017
1. Interest rates will stay low
Another 0.25% hike is expected in late spring, taking the Bank of England base rate to 0.75%. That will add £22 to the typical £175,000 tracker mortgage, but with more than half of all borrowers on fixed rates, it will probably go unnoticed by most homeowners. With the economy weak, the market does not expect any further hikes across the year. Mortgages will remain cheap although, with inflation outpacing wage rises, will still very much feel like a burden.
2. Housebuilding will rise
New home building has picked up with 217,000 homes coming on to the market in 2016-17, up 20% on the year before. But that only 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 “Brexodus” migration numbers continue to fall and construction activity picks up further, the supply side of the housing equation will be less pressing than in previous years.UK house price growth to slow dramatically in 2018, say experts.
3. Landlords will lose out to first-time buyers
First-time buyers should be in the ascendant in 2018, with lending for buy-to-let in retreat. As recently as 2015 landlords snapped up 120,000 houses using buy-to-let finance, but the Council of Mortgage Lenders expects this to fall below 80,000 in 2018. Rising taxes and tougher lending criteria are slowly tipping the balance in favour of homebuyers rather than property speculators.
4. Stamp duty cut and help to buy will continue propping up developers
Philip Hammond abolished stamp duty for all properties up to £300,000 bought by first-time buyers with immediate effect in the budget. The move will save four out of five first-time buyers up to £5,000. But the Office for Budget Responsibility predicts that it will raise prices by 0.3%, with the increase coming in 2018. Meanwhile, the help-to-buy scheme has been given another £10bn boost, providing financing until 2021, although critics say it has been squandered in chasing up the price of new-builds.
5. Tenants may find some relief, at last
After years of galloping rent increases, landlords are finding they can’t squeeze tenants any further. Average UK rents rose by less than 1% in 2017, and fell in London. With salaries under pressure from inflation, few expect real rent increases in 2018. Tenants will applaud the new ban on letting agency fees – when it eventually arrives. There is still no date fixed for the ban to come in, but the government insists it will happen some time in 2018.
6. The rich will go higher and higher
The 56 storeys of One Nine Elms will race up London’s skyline during 2018, with the first buyers (prices started at £800,000 at launch) moving in in 2019. But its crown as the city’s highest residential tower will be swiftly grabbed by the Spire in Docklands. It will have 67 storeys housing 861 suites (many at £2m-plus) and will be completed in 2020.
Story Credited to The Guardian.
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