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Will We See The Housing Market Grow In 2018?

Will The Housing Market Pick Up Momentum in 2018?

UK house prices fell for a second consecutive month in January as many consumers across the UK struggle with the January squeeze and shrinking disposable income – putting major spending decisions, such as moving home, on hold.

Last month, the average price of a home in Britain fell 0.6% to £223,285 according to the mortgage lender Halifax. The drop followed a 0.8% fall in prices in December and drove down annual house price growth to 2.2%, the slowest rate in six months.

Russell Galley, Managing Director of Halifax, commented that house prices fell despite a backdrop of rising employment in Britain and the government’s decision to scrap stamp duty for first-time buyers on homes selling under £300,000.

While falling house prices and scrapped stamp duty for first-time buyers should naturally indicate a rise in new buyer inquiries, this, in fact, has fallen for its 10th successive month with properties supplied to estate agents’ slipping back to record-lows seen around the middle of 2017.

Finally, while many areas of the UK suffer a drop in house prices, with London, and particularly its high-end properties having the sharpest fall in sales, the North West of England, Northern Ireland and Wales have all in fact been successful, posting some of the strongest price growth results in 10 months.

Why have prices continued to fall?

The lack of growth in consumer activity and the depletion of disposable income in January has been caused by household finances coming under renewed pressure over the past year with inflation outpacing pay by 0.6%.

Additionally, with the progression of Brexit and the fall in investor confidence, the pound received a huge decline in value – the major driver behind rising inflation that has pushed up the cost of goods and services imported from abroad.

Jonathan Samuels, the chief executive of the property lender Octane Capital, said uncertainty over Brexit was also making consumers more cautious, predicting “see-sawing” in house prices throughout 2018.

“High inflation and low economic visibility amid ongoing Brexit negotiations are holding the property market to ransom. While the lack of supply and low borrowing costs rule out a material deterioration in prices, the cost of living and caution around the UK’s exit from the EU are starting to get the upper hand,” he said.

Halifax added that a backdrop of low mortgage rates and a shortage of homes on the market were preventing sharper falls in UK house prices that may reignite demand and support the housing market in the coming months.

To conclude the UK property market is expected to be roughly flat in the coming three months as many economic pressures continue to hold the “property market at ransom”.

How can auction help?

While many businesses in the industry struggle to gain momentum amidst the economic uncertainty, IAM Sold and the auction market has continued to rise above the economic restrictions by creating a platform where both buyers and sellers meet on an agreed price, proving advantageous to both parties wanting a quick and secure sale.

IAM Sold’s first auction of 2018 sold 84 out of 100 lots entered, proving a great start to an exciting year ahead.

If you want to break away from the industry norms and sell or buy a property swiftly and securely, contact our team today on 0845 519 3126 and see what auction can do for you.