Uncertainty over the direction and progression of Brexit could have a marked effect on the housing market, if the latest predictions from experts in the industry are to be believed.
RICS, the Royal Institution of Chartered Surveyors, has predicted growth in house prices will slow during 2018. Their market survey has revealed a gradual slowdown in enquiries from would-be purchasers, along with fewer sales. People are exhibiting greater caution over house purchases, and this has contributed to a slowdown for the final weeks of 2017. This looks set to continue as the New Year begins.
How far will prices fall?
“While there are certainly indications we’re going to see house prices stalling in the New Year, they are not likely to fall too far,” said Darren Pescod, CEO of The Mortgage Broker Limited. “As the forecast stated, the lack of housing stock will prevent prices from dropping significantly.
“It’s also interesting to see how the pattern varies depending on the area we are looking at. RICS noted that prices in London were lower than in the recent past, and this would spread from the capital to affect surrounding areas in the South East as we progress into 2018. However, prices in northern England, and in Wales, Scotland, and Northern Ireland, are likely to remain buoyant. This will prevent a big drop in property values for the whole nation in the New Year.”
Affordability and lack of stock
The overall picture is one of a stagnant market during 2018, when evaluating all the available data. While new properties are being built, there is still a woeful lack of property available for buyers in many areas. Furthermore, average property prices in many areas are still out of reach for many buyers. This will further contribute to a lacklustre market for 2018.
Brexit and the ongoing negotiations are also playing a role. The pound has fallen since we voted to leave the EU, and that has led to a rise in inflation. The ‘wait and see’ approach adopted by many is still being played out, and is likely to continue for some time yet. Furthermore, household budgets are being squeezed by the rise in inflation and the stagnant wages seen across the country. This is hardly making it easier for people to afford their own property.
“I think we are more likely to see a stagnant housing market in 2018 rather than bearing witness to a prolonged drop in prices,” added Darren Pescod. “While some areas in London and the South East might see a drop in asking prices, this is unlikely to spread to other areas, especially those in northern England and beyond into other parts of the UK.”
Certainly, 2018 is shaping up to be an interesting one for the UK housing market. It is also likely to be another frustrating one for anyone looking to get onto the housing ladder, and those looking to get the best price for their properties.
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