2017 UK Property Trends
This year has seen a changing property market and the UK property trends highlight the adjustments our market has faced in 2017. With house prices, bridging loans and the Help to Buy scheme all seeing changes this year, it’s uncertain how these property trends will affect the market in 2018.
The UK house price trends show differences within the property market. Statistics released from the most recent UK House Price Index Summary (September 2017) have found the average house price in the UK stands at £226,367.
This is a staggering increase of 3.8%, with figures from September 2016 standing at £217,888 as the average UK house price.
London is one of the UK’s most expensive areas to live. This is emphasised by recent statistics released by Hometrack that suggest that house prices in the capital are now 14.5 times the average earnings of those who live and work in London. This year alone sees a 60% increase in house prices in London, compared to 2007 prices. With prices on the rise, it’s clear to see why Londoners are facing a property trap.
Bridging loans see a decrease
For those who wish to finance a move into a new home but are struggling to find a buyer for their existing home bridging loans are an essential. Bridging loans ‘bridge’ the gap between the sale of homeowners’ current home and completion date of their new property.
Bridging loans saw a decrease between Q2 and Q3 of 2017, with a reduction of £7.32 million in Q2. Quarter 3 currently stands at a total gross lending of £142.75 million, compared to a total of £150.07 million in Quarter 2.
The Help to Buy and sales volume relationship
The Help to Buy scheme, first introduced in 2013, has helped more than 130,000 properties to be bought, with 80% of those being first-time buyers.
Despite the apparent success of the Help to Buy scheme, there has been a 17.1% decrease in sales volumes in England, with 79,919 properties sold by July 2016 and 64,592 by July 2017.
It is apparent that 2017 has seen a difficult correlation between Help to Buy and the effect on sales volumes. It is difficult to predict the reasonings behind the drop, but one could be the increase in house prices putting off buyers.
Predicting the trends for 2018
While the Chancellor’s most recent budget hasn’t had an effect on this year’s property market, it will certainly have an unprecedented effect on next year.
There were two main points that came from the Autumn Budget by Philip Hammond, one of which is the abolishment of stamp duty land tax. From November 22 2017, first-time buyers will not longer have to pay stamp duty on home under £300,000, a move which is said to benefit 80% of first-time buyers.
The final proposal to come from the Autumn Budget, is the news of extra financial support for house building. The £15.3 million will be used towards creating 300,000 new homes a year for the next five years.
This includes £1.2 million for the government to buy land to build homes and £2.7 billion for infrastructure that will support housing. This is good news for the housing market in the coming years as the amount of permanent dwellings built in England has been decreasing since the 1970s.