House price growth looks set to judder to a halt in 2018 or at best manage a small below-inflation rise, as the twin spectres of Brexit and rising interest rates put the brakes on the property market.
Following what some have called a lacklustre year, homeowners and those looking to sell in the coming months have been told to expect an underwhelming and subdued 2018, with a number of leading commentators predicting UK house prices will either stay flat next year or perhaps rise by 1% or so.
However, the prognosis for London – which according to the estate agent Savills has experienced house price growth of 70% over the past decade – is more downbeat, with many economists forecasting that prices in the capital will once again slide into negative territory.
Six factors influencing the UK property market in 2018
A number of commentators are pencilling in UK average price growth of about 1%, which would mean property values falling in real terms. Of the two big lenders that operate well-known price indices, Nationwide said it expected property values to be “broadly flat in 2018, with perhaps a marginal gain of around 1%”, while Halifax allowed itself some wiggle room by predicting UK growth in the range of 0% to 3%.
Meanwhile, according to a Reuters poll of 28 housing market specialists published last week, property prices will rise by 1.3% nationally, but fall by 0.3% in London. The former figure is less than half the current rate of consumer price inflation.