What is likely to happen in the property market in 2018? Well, after this year of unpredictability it will be a brave analyst who makes firm claims. One thing is for certain and that is the availability of mortgages will be the linchpin of recovery for the market place. According to the Council of Mortgage Lenders, overall lending volumes are now at their lowest level. This means that many first time buyers, who a vital for a healthy market are blocked from entering the sales arena.
Adam Challis, Head of Research for Hamptons International estate agents, claims that they are “very keen to see responsible lending, but it must become more readily accessible.” This sentiment is often echoed throughout the media, that the British people are prepared to face up to the level of debt that they have to repay, but that improved levels of lending is vital to keep the property market buoyant in this time of austerity. These government proposals, although severe in some aspects of the public sector should enhance the UK economy for a stronger future in the global market.
There has been a surge in cash buyers over the last year with Grenville Turner, CEO of Countrywide claiming that “the proportion of cash buyers is now at 62 percent.” This is in comparison to the usual 25 percent across the UK and 40 percent in Central London markets. The exchange rate will also add to the higher number of international cash buyers arriving on British shores to capitalise on favourable rates. Buyers using dollars or dollar-pegged currencies often experience a twenty percent discount compared with those using sterling.
This may have also contributed to the 2.5 percent growth in pricing for UK properties since the beginning of the year. London and the South East fared even better as traditionally they are better placed to deal with economic instability. They grew 5.4 and 4.3 percent respectively. These figures point to a small increase in house prices for next year.
Although the full year predictions for 2018 won’t be out for another month, there is some positive news regarding rates and GDP. Major lenders have made some rate reductions; these include Northern Rock, Woolwich and Abbey and GDP was up by 0.8 percent in the third quarter. Admittedly the Bank of England’s ‘October Trends in Lending’ report hints that it is unlikely that lending requirements will be relaxed in the short term. But many global markets have responded positively to the UK’s outlined plans for the economy. This approval twinned with the upgrade from the financial research company Standard & Poor of the UK’s status from ‘negative’ to ‘stable’ certainly injects some hope into the housing market.