From the interest rate rise, the continuation of Help to Buy and the Stamp Duty exemption for first time buyers, through to the Call For Evidence into the housing market by the housing minister and the promise of 300,000 more homes being built, what can we take away from this year? More importantly, what do we expect for next year?
Reallymoving have spoken to some experts in the property field to ask what their property predictions are for 2018.
“2018 is nearly upon us and the Government has sent out its Call for Evidence (CFE) on how to improve the home buying and selling process. We all have a feeling of deja vu of course. The question is, will any changes introduced simply be a replacement hip?
I have read the CFE document thoroughly, and I have already read a number of submitted responses and had a meeting with the DCLG. There seems to be three main ideas: information upfront, reservation agreements, and the possible reversal of Caveat Emptor (let the buyer beware).
A number of property lawyers have suggested changes to particular parts of the conveyancing process. However, I don’t think the Government will want to get involved with the smaller component parts. Neither do I think the Government will want to mandate any suggested changes.
Whatever the outcome, there does seem to be the beginnings of a groundswell of desire to improve the process from the stakeholders themselves.
Everyone deserves a better home buying and selling process. Let’s hope within a year or so we have one.”
“With fewer housing transactions likely, conveyancers need to ensure that they take a good look at where they get their instructions from, and at what price. Conveyancing instructions aren’t going to keep walking through the door and firms need to adapt.”
“It seems very much that we are in a period of Brexit limbo where uncertainty is the new norm and Theresa May seeks to maintain a status quo between the euro sceptics and remainers within her cabinet. The Chancellor Philip Hammond is still under pressure to further increase public sector pay and increase spending on the NHS but cannot deliver any of this without borrowing more money to add to the already significant public debt.
Nevertheless, the economy appears I believe, to be in pretty good shape and it feels very much that the only thing really holding significant economic growth back is the Brexit question.
Consequently, it seems that there are undoubtedly opportunities for growth and expansion now whilst the majority are perhaps sitting on their hands worrying about the European outcome. If growth and expansion are achievable during a repressed period, then once the ‘brakes are off’ there should be even bigger opportunities available.
Overall it seems that we should be optimistic and take advantage of the opportunities, particularly if these opportunities are not being grasped fully by others. There are of course always risks but on balance those risks seem worth taking to grow the economy, maintain high employment but also improve productivity and ensure wages grow as both inflation and interest rates creep upwards.”
“In terms of what is happening in BAR circles and amongst our Members, in 2017 (when compared to activity levels in 2016) we have seen domestic moving activity increase by circa 3% and commercial moving by just under 2%. However, volumes reported on Overseas movements have reduced year on year by a whopping 18% which is largely due to the confusion caused by the changes HMRC made to the Transfer of Residence regulations and of course the general levels of uncertainty as a result of the ongoing Brexit negotiations.
In terms of overall transaction numbers in 2017, Members are reporting levels at just under 4% down on 2016. As we head into the new year, Members are generally of the view that 2018 will be much the same as 2017 although as always there are some fairly significant differences of opinion on the matter with some claiming that activity levels, current and future, are extremely robust, whilst others are bemoaning an ever more competitive market place which sees both opportunity levels and pricing disappearing through the floor.
I think we definitely face challenges in 2018 relative to the availability of affordable housing, the ever growing number of ‘unregulated’ businesses that operate in our sector and of course access to new labour as, like the wider logistics industry, we are suffering from a dearth of new starters and particularly drivers into our industry.”
“We’ve recently seen record levels of first time buyer interest – over 50% of our buyer registrations are now from first time buyers. London, the Midlands and the North West are the regions with the highest proportions of first time buyers at 68%, 55% and 57% respectively. We’re seeing a steady rate of take up of Help to Buy ISAs, at around 17% of purchases, strongest in London, the North West and Northern Ireland, and a steady increase the number of buyers using shared ownership – up from 4% to 6% over the past 12 months.
2018 is the year for the first time buyer. The government’s incentive on reduced stamp duty for those who haven’t previously purchased a property should give FTBs a serious head start. By now, many FTBs have also had time to accumulate monies into their Help To Buy ISA or Lifetime ISAs, which can be used towards the home buying costs and is boosted by a 25% bonus from the government.”
Others in the industry are more concerned about the uncertainty of Brexit, and the new efficiency standards coming in 2018, as well as changes to landlord fees:
59% of agents interviewed by ARLA Propertymark
think rents will rise as landlord fees will be passed on to tenants. Agents are also concerned that the new energy efficiency standards in 2018 could take 300,000 properties off the market if they don’t meet the minimum standards. Limiting the stock of available properties could push up prices. Approximately half of agencies questioned said they felt that the Stamp Duty exemption for first time buyers
would not make much difference to the number of sales.
Estate agency Winkworth said: “With buyer interest at an historic low, we have experienced low levels of transactions and we expect this to remain the case throughout 2018, albeit picking up modestly from this year’s levels. The announcement of no stamp duty payable on properties under £300,000 for first-time buyers...should increase buyer interest levels at the lower end of the market, thus encouraging home owners to consider moving.”
said that 2017 had been “a little underwhelming” and predicted that the beginning of 2018 would not see a big improvement due mainly to the issue of supply.
It looks like 2018 could be a good year for first time buyers, but as the exit from the European Union draws closer, it’s clear that in the midst of uncertainty services are going to have to exceed expectations and attempt to streamline the moving process.
Do you have any property predictions? Are you planning to move next year? Let us know in the comments below.