The last few years have proven to be highly eventful for the property market and the economy in general, with the surprise EU referendum outcome causing high levels of uncertainty and volatility, as well as changes to stamp duty, which netted a record thirteen billion pounds for the taxman in 2017. According to property expert Allison Thompson, the managing director at Leaders, 2018 will be a 'positive, albeit challenging' year for the property sector. Not long ago, avid remainer George Osborne warned that Brexit would have extremely negative implications for the UK, pushing the economy into recession and plunging house prices down by 18%. However, Brexit has not had the negative effect first predicted by economists in terms of house prices, and they could increase further.
Allison Thompson is the MD of Leaders, the Letting & Estate Agents with branches across the UK. She believes that there are multiple reasons to be confident for those selling, letting, buying or even renting this year. Although many economists were expecting the property market to suffer after the results of the referendum and the uncertainty of a general election, but the opposite has occurred, claims Allison. There was surprisingly growth in property prices all around the UK and "a renewed sense of positivity." This trend could continue well into 2018 and there are a few reasons why this year could be a successful one for property investors. If prices continue to rise, it could be an ideal time to sell property. Tenant demand is predicted to remain high and all the stamp duty changes are influencing people to get moving. These are Allison's predictions for the remainder of this year.
We could be seeing a further rise in house prices and rents, despite the slowdown in the rate of increase. The outlook has still managed to stay positive. The simple principle of supply vs demand is still true today, with the lack of supply pushing demand and therefore prices up. Leaders have predicted a 4-5% increase across the country, with some areas that are well connected to London likely to have more. High demand also means that landlords could be seeing even better return on their investment.
Stamp duty might be an annoyance to some, but for first time buyers, it could have an impact on their property decisions this year. Stamp duty will be scrapped for first-time buyers investing in homes under £300,000, in an act to "revive the home owning dream in Britain" says chancellor Philip Hammond. The incentive of making a first-time purchase more affordable will encourage many to make their first move onto the property market. Many people at the same age may also be competing even more for rental properties, with huge demand for a small supply.
The most unpredictable factor for the property market is likely to be the Brexit negotiations between the UK and EU. Nobody is quite sure what the result will be, and the real estate market is highly sensitive to market confidence levels, which could go either way. Any progress could lead to people confidently making moves on the property market, but any problems could lead to people playing it safe and staying put.