There are few topics that are as consistently hot as property prices; what property owners and prospective owners all want to know, especially with Brexit getting closer, is: what will happen to housing prices over the next year? We have rounded up all the latest trends and predictions to give you the most balanced answer possible.
Rising prices, dropping prices or a flat housing market?
Experts are making varying predictions. Some believe prices will remain flat in 2018 due to high levels of stamp duty. Others believe the UK as a whole will see some growth, with stagnation in London. Price Waterhouse Coopers, on the other hand, believes house prices will continue to rise for another seven years.
House price stagnation – regional variations
But, it's a fact: house price growth is stagnating across the country, although with considerable regional differences.
House prices in London and its commuter belt have seen the slowest growth of any region in comparison with pre-Brexit rates of 12 per cent. The national average, by contrast, is 4 to 5 per cent per year, a figure that has remained stable.
This does not, however, make London properties any more affordable than this time last year, and is creating a waiting-game dynamic between buyers and sellers. As homeowners wanting to sell are unwilling to lower prices, potential buyers are adopting a wait-and-see stance in the hope of prices dropping later in the year – and beyond.
What is definitely changing is the rate at which the capital's properties are being bought up by buy-to-let investors. Nothing to do with Brexit, mind, and everything to do with recent changes to buy-to-let taxation and regulations.
The impact of Brexit on house prices
One question that continues to worry everyone is just what the impact of Brexit will be on the housing market. Should we expect a steep fall in house prices?
Well, the expert consensus is that this largely depends on what kind of a Brexit we will have. 'What [Brexit] means [for property prices] is dependent on what it means for the economy', explains Lucian Cook, head of research at Savills. A no-deal Brexit could mean job losses, which could in turn lead to a fall in house prices. However, London may well benefit from non-EU buyers attracted by the falling pound. Even with a smooth Brexit transition, the UK may see an increase in interest rates, which could lead to a decrease in house prices.
The overall trend, then, is unmistakably towards a slowing down of house price growth, regardless of what the future holds for Britain's relationship with the European Union.