Downward trend for London property to continue
Rightmove has predicted that that the fall in property prices in London will continue in 2018
London seems to be most affected when it comes to the property sector in the UK, a trend which is all set to spill over to the next year. Although, parts of the city are expected to react differently, as the lower and middle sectors of the market are expected to defy the general trend for the city.
This downward trend is part of a generalised fall in property prices across the UK, aided by a sluggish economy and a squeeze on consumers as a result of brexit vote, which shows few signs of optimism.
The British Chambers of Commerce (BCC) has also predicted similar scenario. It has downgraded its three-year outlook for the economy, cutting growth expectations to 1.5 per cent in 2017, 1.1 per cent in 2018, and 1.3 per cent in 2019.
According to Rightmove, the capital’s property market will fall another 2 per cent in 2018, continuing this year’s trend which witnessed a 1.8 per cent decline. Prices in London dropped 3.7 per cent and 2.6 per cent nationally in December. The report said that at the upper end of the market, prices are likely to drop 4 per cent next year compared to 3.7 per cent in 2017. Rightmove director, Miles Shipside said that economic and political uncertainty tend to weigh more heavily on the capital. Next year, UK property will continue the 2017 trend by being a real mixed bag of different price pressures both up and down, but the net result is that there is forecast of another year of slowing in the pace of price rises. Shipside said that stretched buyer affordability, tighter lending criteria and increased stamp duty for second-home owners are all having an impact. The agency has predicted that house-price growth nationally will cool further to 1 per cent next year, the weakest since 2011.
Meanwhile, the Bank of England may also raise interest rates further next year. Last month, it hiked interest rates for the first time in a decade.
Rightmove said that the move by Chancellor of the Exchequer Philip Hammond to abolish stamp duty for first-time buyers on homes up to £300,000 is a good news. The abolition of stamp duty for first-time buyers will also apply to the initial £300,000 of the purchase prices of first homes up to the value of £500,000. But, this move will ultimately boost prices as demand increases and buyers’ negotiating power diminishes, said Rightmove.