Did Property Market Predictions from Industry Experts Come True?
At the start of this year, our property mentors wondered what would be the significant influencers on the property market in 2017.
Let’s take a look and see how our industry experts fared in their predictions.
House price growth
We compared the Royal Institution of Chartered Surveyors (RICS) prediction that house prices would rise by 3% against that of global real estate services provider, Savills, who predicted zero growth in UK house prices in 2017.
The year’s not over yet, so we don’t have an overall percentage, but according to Nationwide, house prices saw minor growth last month, rising 0.2% between September and October. That’s lower than last October's rate of 4.6% and the forecast remains subdued.
Economic research consultancy, Capital Economics, predicts house prices will grow by 2% next year while investment management company, JLL, estimates the average UK property will rise by only 1%.
Shortage of stock
Experts commented on the severe shortage of houses in the UK, and this is something that’s been widely acknowledged. Earlier this month, the Government pledged to increase the affordable housing budget by an additional £2 billion to over £9 billion.
They also created a £3 billion Home Building Fund to build more houses across England while introducing schemes like Help to Buy, which assists people in raising the deposit they need to buy their own home.
Encouragingly for property investors, the Government has been meeting with large and small property developers, local authorities and housing associations to facilitate an increase in the number of homes being built across the UK.
The buy-to-let market
With landlords facing stricter affordability checks for buy-to-let mortgages and the beginning of the withdrawal of tax relief on mortgage interest our industry experts foresaw an increase in rents.
Savills estimated that rents would rise by 2.5% in 2017, and up to 3% in London, with most commentators predicting rent rises of 2-3%.
According to HomeLet Rental Index, average rents across the UK rose by 0.9% in October this year, compared to the same month a year ago while on an annualised basis, rents rose in 11 out of the 12 regions of the UK covered by the research. The average monthly rent now stands at £909.
The Brexit impact
We’ve escaped the house price crash that some forecasters, including the International Monetary Fund, warned could happen in the event of a Brexit vote.
And despite continuing uncertainty as Brexit negotiations ramble on, most investors feel there are few alternatives as profitable as property. When it comes to return on investment, there’s still nothing to beat the property market.
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