House prices set for 'steady' growth according to forecasters

House prices set for steady growth according to forecasters

Experts have suggested that house prices will experience little to no growth in 2018, with some suggesting that prices could even fall in certain areas.

The market forecast by This Is Money polled industry experts from leading lenders, property analysts and the Royal Institution of Chartered Surveyors (RICS). While opinion was split on the detail, the overwhelming consensus among experts was that any growth will be relatively minor compared to previous years – little more than 2-3 per cent over the course of the year.

Some have predicted that London house prices – which have soared in recent years - will remain steady or even fall in 2018, with the most noticeable drop towards the tail-end of the year. However, growth is expected in regional capitals, such as Manchester.

Many pointed to the continuing uncertainty over Britain’s exit from the European Union as a source of caution among buyers, while sellers could be further dissuaded from putting properties on the market as the number of homes which remain unsold - or failing to meet their asking price – continues to climb.

Responding to the market forecast, Natalie Bradley, Head of Conveyancing at the national law firm Stephensons, said: “There’s been a lot of speculation about the direction of house prices during 2018. I think they are obviously not going to boom this year because of consumers’ concerns about inflation outstripping wage growth, therefore reducing their disposable income for a ‘big ticket’ purchase such as a home, combined with ongoing widespread uncertainty about Brexit.

“The exemption from stamp duty for first time buyers is having little effect on the housing market because most first time buyers continue to struggle to raise a deposit. There remains a heavy reliance on gifts and in any case, lending criteria is that much more stringent than in the past.

“While Wales is replacing stamp duty with a land tax on 1st April, this too will have minimal effect on the residential sector because buyers are only affected detrimentally once property values reach £400,000. As the starting band is £180,000, a lot of buyers will be exempt from payment of the tax.

“I share the widespread belief that London will remain steady because prices in the capital are already hugely disproportionate to the rest of the UK but prices in major regional; cities such as Manchester and Birmingham will witness higher increases in price because there’s more demand for property in such locations.

“I’m one of those looking to move home and finding that most properties are sold within 24 hours of going on what has become a very competitive market, partly because of the imbalance between demand and supply with far fewer homes being offered for sale as people decide to sit tight.”