Tuesday 24th October 2017
There is a lot of uncertainty in the UK property market at the moment, what with uneasiness surrounding the ongoing Brexit negotiations and the impending Autumn Budget. And it looks as though this word ‘uncertainty’ will be dominating market behaviour moving into 2018 - but with the housing crisis remaining at critical levels, will there really be any change?
Brexit negotiations have hit the London market hard over the past year with the capital achieving the lowest growth throughout the UK in the year to August 2017 at 2.6% and this shows no signs of abating in the foreseeable future. In fact, it is very difficult to predict any changes to this trend until we move into the final stages of the talks and approach the deadline in Spring 2019.
Although uncertainty is clearly the overriding driver, there are other factors to consider. Rising interest rates have made it harder for first time buyers to secure a mortgage and stagnant wages are continuing to have a negative effect. Add to this the changes in stamp duty affecting the higher end of the market and the result is that many people are being a lot more cautious, putting selling their home on the back burner.
The Tables Have Turned
The above factors are, however, not necessarily cause for concern across East Anglia. Generally, we are used to the London market dictating activity for the rest of the country, but over the past year the tables have turned, with the rest of the UK doing the job of buoying the national market.
In the year to August 2017, the East of England matched the East Midlands, South East and South West claiming joint second highest annual house price growth in the country at 6.4%, behind the North West at 6.5%. This far surpassed London which achieved the lowest growth in the country at 2.6%.
Cambridge Property Continues to Soar
Whereas many commuter towns such as Reading have seen falling property prices throughout 2017, Cambridge is continuing to buck the trend.
Prices in the City have risen 55% in the last five years, compared with average growth of 29% across England and Wales in the same period. This has pushed prices to the same level as London Zone 2 locations, at £630 per sq ft.
With Cambridge’s continued emergence as a world-class technology hub, there is forecast to be an additional 2,200 jobs in the City in the next five years. Couple this with improvements to transport links and a steady demand for student accommodation and there is plenty to look forward to for buyers, sellers and landlords in the East Anglian region moving forward.
Property Market Outlook 2018
It is difficult enough to predict how the property market will look in the most stable of times, but with Brexit negotiations at a deadlock and the potential of changes being announced in the Autumn Budget, we really are looking into the unknown.
However, the truth is that we would expect much of the same moving into 2018. Uncertainty may affect prices, however this will be offset by the continued chronic undersupply of property. And, although first time buyers may find it harder to get a mortgage, there are still some fantastic deals out there.
In summary, strength of demand, lack of supply and high employment are all propping up prices and will mean a continued upward trajectory until the balance is redressed. This lack of supply will be the key driver to ensuring that, despite some uncertainty, property market behaviour moving into 2018 - especially in East Anglia - will remain largely unchanged.
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