Six factors influencing the UK property market in 2018
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.
3. Landlords will lose out to first-time buyers
4. Stamp duty cut and help to buy will continue propping up developers
5. Tenants may find some relief, at last
6. The rich will go higher and higher