2017 has been a year full of unpredictability, and the country’s housing market has been no exception, with recently released figures capping off the year with one final twist in an ongoing tale of uncertainty.
For the first time in more than four years, The Royal Institution of Chartered Surveyors (RICS) reported flat house prices in Britain during the past three months. This means that their members observed an equal number of houses going up in price as they did those going down, so that the average monthly price balance reached a stalemate of zero.
Why did the market stagnate?
Given that this is the lowest price balance that RICS has reported since March 2013, speculation was rife as to what caused it, with changes in taxation, the recent struggles faced by the pound, and a tumultuous political and financial year in general having all been touted as possible explanations.
As is often the case with the UK’s housing sector, London quickly emerged as a driving force behind the findings, as the expensive hub is the area of the market that has been the most susceptible, and therefore hardest hit, by concerns from foreign investors over Brexit, with many hesitant to hand over their money until the outcome of any deals regarding living, working and trading have been finalised.
What lies ahead for the UK housing market?
Though the year has been rounded off with these potentially disappointing figures, keeping very much in line with the year of ambiguity that preceded them, some experts are feeling at least somewhat more optimistic about the future. Property website, Rightmove, says that despite predicting further falls for the most expensive central parts of the capital and its surrounding boroughs, rises in up-and-coming areas elsewhere throughout the UK will see the county’s overall house prices rise by 1% over the next year.
Though this would in fact be the lowest annual increase since 2011, it does reaffirm the suggestions put forth by another report – this time from Savills – that despite still having a rocky road ahead, the housing market has indeed performed better this year than had been previously feared by some, with them in turn predicting a 2% overall rise in prices for 2018, despite further falls in London on the horizon.
Since the 1980s, house prices in the capital have consistently grown at a faster rate than the rest of the UK, and so this shift in focus to other parts of the country moving forward is perhaps the most interesting takeaway from this year’s housing records. Though still brandishing price tags well above those found elsewhere, it seems London’s vast price growth has perhaps finally gone beyond its peak, and it is now time for other areas to start playing catchup, which could lead to some very fascinating developments in terms of pricing and population distribution in the future.