Here are three predicted trends to look out for:
1. House Prices
The London price bubble hasn’t burst, yet growth has slowed. Despite reduced activity in London’s housing market, figures from Nationwide show that the average London house price is more than double the typical overall UK price - £474,000 compared with £217,000. Affordability pressure is seen as a major reason for slower growth in house prices in 2017.
Martin Ellis of Halifax told Property Reporter: “Despite the high level of uncertainty, UK house prices should continue to be supported by the shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates.
“Overall, annual house price growth nationally is most likely expected to slow to 1-4% by the end of 2017. This relatively wide range for the forecast reflects the higher than normal degree of uncertainty regarding the prospects for the UK economy”.
A range of property experts have given their personal predictions for house price changes in 2017. An average rise of 2% is their collective opinion, with just one forecasting a fall (of 4%). If inflation reaches its predicted level of 2.7%, central London will see slight drop in property prices in real terms.
2. Buy To Let
Since April 2016, anyone buying a home that is not their main residence has had to pay a 3% stamp duty surcharge. This meant that, for second homes or buy-to-let properties, the rate for properties priced at more than £1.5m reaches 15%.
This change has had a huge impact upon the Buy To Let sector, contributing to the slowdown in the London housing market post March 2016.
The Buy To Let sector is therefore expected to cool further in 2017, however Ellis adds: “The long-term case for investing in housing remains strong with the sector set to continue to offer attractive rates of return compared to alternative investment classes despite these developments.”
3. External Financial Impact
Both inflation and interest rates influence house prices and look set to have an impact during 2017.
A weakening sterling value is predicted to increase inflation. However, interest rates are not predicted to rise until 2018. The Bank of England is expected to take a cautious approach to any increases, partly due to protect householders’ ability to meet higher repayments on debt.
Predicted changes to interest rates will affect homeowners and property investors alike, with a subsequent impact upon the level of rent payments. It seems that the low, steady rates of 2016 will continue into 2017, offering a degree of reassurance to all.
“Although the London property market has slowed, we have many serious buyers who are keen to purchase in North London,” says Jason Dyer of JTM Homes. “Low interest rates have helped people to consider moving or investing in the area.”
If you are thinking of selling a property in the north London area, talk to the friendly team at JTM Homes. With dual office marketing, (Highgate and Archway), a database of interested potential buyers and proactive promotion of your property, we get you moving… fast.