Changes to Expect from the UK Property Market in 2018
04:12Interest Rates are Expected to Increase Next Year
The next year is going to be a bumper for renters and first-time buyers. Interest rates are expected to work in their favour come 2018.
Interest rates are expected to rise by about 0.25% in spring. This means that the base rate of the Bank of England is going to be increased to 0.75%. This adds a total amount of £22 for a tracker mortgage worth £175,000.
However, it is also a fact that more than half of all the borrowers are currently at a fixed rate. This is why despite the good news, there is a very good chance that this may not be felt by every home-owner.
There has been an increase in the number of new homes were built. Out of these units, 217,000 came onto the market around 2016-2017. Compared to the numbers accrued the previous year, this shows a total increase of 20%. This means that the total is now being brought back to levels that were observed before the occurrence of the financial crash. However, this is still seen as quite a long way from the government set the target at 300,000.
There is a decrease in a migration and combine that with the increase in construction activity, the supply of houses are going to be under less pressure when compared to how things are the previous years.
However, it has been predicted by the Council for Mortgage lenders that the numbers are going to fall below 80,000 next year. The increase in taxes, as well as the tougher regulations set for lending, gives more advantage to homebuyers instead of property speculators. Chancellor Phillip Hammond announced that for this year’s budget, property stamp duties are abolished for first-time buyers that want to buy properties that are worth up to £300,000. This means that first time buyers are likely to save up to a total amount of £5,000.
The break for stamp duty along with the availability of the equity loan scheme Help to Buy will mean that there is never going to be a better time that will be deemed perfect to buy brand new homes.
The increase in rent which has been going on for years would likely mean that landlords will no longer be able to add any more to their present rates. The average rental rate in the UK increased by one percent this year in London. Another reason why people will not expect rate increases this year is the fact that salaries are presently under considerable pressure from inflation.
It is expected that tenants will be happy the moment the ban on the fees that letting agencies charge will take place. While it has not been specifically stated when it is going to arrive, it is expected to next year, as was revealed by the government.
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