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The crucial factors to monitor reported by the Royal Institution of Chartered Surveyors are that overall housing supply will remain historically low. House price growth in the UK will likely come to a halt over the course of the year as the number of transactions reduces slightly. However, it should be noted that the national prediction reports expected price growth in some regions, offsetting anticipated declines in London and the South East.
Home owners have been fortunate to experience continuous house price increases year on year since 2011, with the national overall average rise during this period accumulating to 30.9%, which is equivalent to a 4.6% rise per year.
If 2017 was a year of two halves, 2018 is likely to see a year of two tiers as the upper end struggles to keep pace with the mass market with a general trend for the market to slow as house prices react to a mixed bag of key performance indicators.
The local property market has seen a reduction in the number of properties coming to the market as demand continues to outstrip supply as political and economic uncertainty remains, with fears of an uncertain post Brexit future. However, despite these negative pressures, the chronic under supply of housing is likely to support house prices and provide an essential counter balance.
All of this is underpinned by historically affordable mortgage rates, which remain extremely low despite the recent interest rate increase. Coupled with overall affordability being stretched by subdued wage
growth and less high-end movers, the likelihood of modest increases is at best the most positive outcome. Most analysts are opting to edge their bets and predict a flat line for the overall market.
The desire to get on the property market and the demand for more space and schooling, which is hard to postpone for growing families, will keep the mass market moving and the right properties in the most sought-after of areas will help to push up prices, especially amongst the more buoyant postcodes and property hotspots.
Contrastingly, the upper end of the market will struggle to keep moving unless properties are priced more aggressively to tempt wealthier but hesitant buyers. The demand for good agents who specialise in selling properties at the high end will increase as vendors will be even more reliant on comprehensive marketing and local expertise.
Despite all of the political and economic uncertainty around the world and closer to home, the UK property market has remained in good health with positive signs for Yorkshire, Derbyshire and Sheffield.
If the predictions for this year prove to be accurate as they did for 2017, then a steady market with limited growth may be the fairest outcome for all, existing home owners will see the value of their home stabilise, while family members may benefit from a break from escalating house prices and position themselves to move up the ladder whilst others finally manage to place a foot on the bottom rung.