Home Economy UK house price growth set to come to a halt
RICS annual housing market forecast – flat national prediction brought about by growth in some regions counterbalanced by price declines in others
House price growth in the UK will likely come to a halt over the course of next year as the number of transactions reduces slightly, according to the RICS housing forecast for 2018.
However, it should be noted that the national prediction includes price growth in some regions offsetting declines in London and the South East.
Overall levels of activity across the residential sector have been a little underwhelming throughout 2017, with the latter part of the year in particular proving something of a disappointment. The RICS UK Market Survey has recently shown buyer enquires stalling, sales volumes stagnating and sentiment turning altogether more cautious as a result.
Overall sales volumes to reduce slightly over 2018
National house price growth set to come to a halt but lack of supply likely to prevent outright declines
Rents to rise by a modest 1%
The likely theme impacting the behaviour of the housing market over the course of 2018 is again expected to be the overriding issue of supply with stock on estate agents books close to all time lows. As such, there are no signs as yet that 2018 will see a turnaround in supply across the second hand market.
Going forward, and looking at sales activity, the market looks unlikely to breach 1.2 million sales in 2018 with political and economic uncertainty proving a hindrance as well as the lack of stock, stretched affordability, tax changes and interest rate rises.
Tarrant Parsons, RICS Economist, said: “Following a pretty lacklustre finish to 2017, the indications are that momentum across the housing market will be lacking as 2018 gets underway. With several of the forces currently weighing on activity set to persist over the near term, it’s difficult to envisage a material step-up in impetus during the next twelve months.
“However, the fundamentals are not much changed from the end of 2017, so levels of activity should soften only marginally when compared to the year just ending. A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts.
“Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.”