Published: 13/01/2017 By Stephanie Wright
The majority of us would agree that 2016 was a fairly challenging year, from the Brexit vote to as far as the number of unexpected celebrity deaths. For the property market alone this was by far a very difficult year for agents in London and across the UK.
Round up of 2016
Looking back on the year, The Guardian revealed, the stamp duty changes which were introduced were already beginning to have an overall impact on the top-end of the market. The threshold for buyers of a second home or buy-to-let property were lowered to £40,000 but a 3% surcharge was introduced in April 2016. The treasury was not able to predict the impact that these stamp duty changes would have to the property market. The period from January 2016 to April 2016 found the sales market booming due to many investors looking to purchase before the Stamp Duty changes came into effect.
The shocking political votes in regards to Brexit then effected the housing market even further. The vote created a wave of uncertainty which lead to the growth of house prices slowing down compared to the rate at the start of the year. Many agents were also seeing a decline in the number of properties coming onto the market.
The sales market was negatively affected by the major events of 2016 however the lettings market was steady and in some areas even lead to a positive effect. Tenants were seeking longer lets which are more desirable for landlords due to extra security and guaranteed rent for a longer period of time.
2017 Predictions
It has been feared by many that 2017 would follow suit and be another difficult year. However, Christmas approached us quickly and the sales market began to flourish once again. This was definitely an unexpected turn but positive news for entering 2017.
Research reveals that in January 2016, 41.5% of homes were sold above the asking price but by November 2016 this hit a steep decline with only 23% selling above asking price. It has been predicted that the growth of house prices will slow in 2017. With the levels of demand increasing, especially for buy-to-let properties, this will outweigh and lead to a 3% rise over the year according to many surveyors’ predictions.
As a result of the referendum, many agents had seen a decline in the number of properties coming onto the market but like many there has still be an increased interest in those looking to buy. RICS says London house prices are set to stabilise due to the increased interest of foreign buyers looking to enter the market.
Halifax UK Housing Market Outlook predicts a slowdown in prices, 2016 saw national house prices rise by 6% however Halifax predicts a 1-4% price rise by the end of 2017. With the reductions in interest rates this has made mortgages more affordable than they have been for years leading to 2017 being an overall good year for the property market. Although at a slower rate, the shortage of housing and low interest rates will help keep house prices rising.
Our Managing Director Patrick Howell provided his personal views on the property market last year.
“2016 was the most roller-coaster year that I have experienced in the industry. I have seen sharp rises and falls and I have been through periods of uncertainty and excitement but never have I been through all of them to such an extent over the course of a single year. The new chancellor seems to be more measured than the last and with no large changes in the last budget that would affect the property market. I can imagine a year of more restrained uncertainty and excitement in 2017 with a tamed increased in sales and lettings prices. I write this with a sense of ambivalence as after the year we have just had, who really knows?”