There is such a prominent level of interest in UK property prices that any change is seized upon by people keen to make outlandish predictions when it comes to what is going to happen next in the market. Therefore, the announcement that UK house prices fell in December of 2017 saw many people make rash predictions on what was likely to happen in 2018. The fall has been classed as an unexpected movement and the Halifax states that this was the first fall in property prices in six months.
In figures provided by the Halifax, the average price of a property in December of 2017 was £225,021 which was a fall of 0.6%. There has been a drop in the annual growth rate, which stood at 2.7% for the three months in the build-up to December of 2017, and the figure had stood at 3.9% for the previous three months.
London house prices are tipped to drop
When it comes to predictions for 2018, it appears a lot of industry specialists are pegging the rate of UK price growth at around 1%. This means when you take real terms into consideration, the value of property will fall. It does seem as though there is a belief that the market will slow down in 2018, but this may be down to the fact that so much focus falls on the London property market.
If you consider the fact that the London property market has witnessed 70% growth in the last decade, some people will say that a slowdown or a fall in prices was long overdue. There is always two sides (at least) to the property market, and bad news for one person or institution is likely to be received more positively by someone else.
Slow rate of growth predicted by mortgage lenders
The difference between London and the rest of the country can be seen in figures provided by the Nationwide. They announced that for 2017, UK property prices increased by 2.6% but they also said that property prices in London fell. This was the first drop in eight years. The Nationwide has tipped a price growth rate of between 1% and 1.5% for the year ahead. The Halifax have said that they expect house prices to increase at a rate of between 0% and 3% over the course of the year.
There have been movements to help people get on the property ladder. It is hoped that the removal of stamp duty for first time buyers will assist people to obtain property, and there is a need to offer more affordable homes. If developers commit to providing more affordable homes, more people would be in a position to engage with the market.
At Geoffrey Matthew, we keep a close eye on the market, so you don’t have to. If you would like to learn more about the property market and what is likely to happen in 2018, please let us know.