The UK property market is undoubtedly one the biggest globally in terms of revenue. Even so, the market has been quite unstable in the past few years with tenants and first time property owners digging deeper in their pockets. However, 2018 seems to be a better year for the two groups with speculations of cheaper prices due to decrease in interest rates.
Historically, the UK property market has been influenced by different factors that have impacted the market in a big way. Factors such as political cloud and financial market play a big role in determining property prices in terms of taxes levied on them. With such instability on the market, you ought to know fast hand how the future will shape up. These pointers will give you an idea of how the UK property market will be in 2018.
2018 is expected to see a rise in property interest rates. Financial institutions have predicted a 0.25% rise in interest rates on the current 0.50% which will up the rates to 0.75%. This is most likely to happen by spring of 2018. This is a very big jump from the 2017 interest rates if anything is to go by.
Even though this rise may take effect, it’s still considered to be very low. So, what does this really mean? For homeowners with tracker mortgage, an additional 22 euros will be added to the current 175,000 euros. This however, will not affect the majority of homeowners who are on the fixed rates plan.
Availability of homes
The current amount of homes does not sustain the greater population of UK citizens. A rise in the interest rates will definitely mean that more homes will be built in 2018. With political and economic changes due to Brexit, more people are expected to leave the country hence availability of more homes.
This is good news for tenants and homeowners alike. As for letting agents, this is good news because more property means more revenue for the business and the economy at large.
First time buyers to increase
The recent changes to the UK property market are set to benefit first time buyers massively. It’s expected that the number of first time buyers will increase drastically to beat the number of landlords. More tenants are expected to climb higher in the property ladder, a factor that is considerably positive for the UK property market. Increase in taxes and strict lending principles are slowly tipping the balance to favor first time home owners against property speculators.
Tenants will benefit at most
The UK property market has been tough on tenants. With consistent increase in rent yearly, most landlords cannot squeeze their tenant’s any further, thanks to new proposed laws. With factors such as inflation on salaries, tenants expect minimal rent increase in 2018. More significantly, the proposed ban on letting agents fee will be music to the ears of many tenants.