According to latest figures from the UK House Price Index (UK HPI) for October, London saw the lowest annual house price growth in the country – at 2.1% and with a monthly price fall of -0.9%, as prices in the capital continue with what some experts view as a necessary correction following the sharp increase in property values of a few years ago.
While transaction levels have slowed in recent weeks, there remains plenty of solid interest from prospective buyers, suggesting that purchasers remain motivated regardless of the looming festive period, and that is why it is hard to see local house prices falling much below their existing level, as demand continues to outweigh supply.
In fact the shortage of supply means that prices could very well start to rise once more in January when the market really starts to pick up.
There was a surge in demand from purchasers between December last year and this January, with Brik seeing a staggering 160% rise in sales valuations, 174% increase in sales viewings and 308% increase in buyer registrations.
Despite little room for giveaways, the Chancellor Philip Hammond took measures to try and boost the property market and get to grips with the housing crisis, during his recent Budget statement.
Hammond’s flagship housing policy was stamp duty relief for first-time buyers with those spending up to £500,000 only being charged on the part of the purchase over the new £300,000 threshold. It is too early to tell what impact this will have on the market - but the general view is that while it is good news for first-time buyers, it will not have a major effect in pricier areas such as Fulham.
The Chancellor also pledged at least £44 billion of capital funding, loans and guarantees overall over five years to boost housebuilding levels, with a fresh target of building 300,000 new homes a year.
As many of you know, there has been no shortage of luxury new homes being built locally of late, including 900 homes in Chelsea Creek and 744 apartments in Fulham Reach, with almost 1,000 of these homes across the two blocks priced at more than £1 million, which is likely to place upward pressure on existing properties in the local area in 2018.
Hammond also announced that the government will attempt to encourage private landlords to offer longer tenancies, with a consultation on the issue set to be launched next year, although undoubtedly many landlords would welcome ‘incentives’ to offer tenants longer tenancy agreements.
But regardless, investment in buy-to-let still continues to outperform most major asset classes, at a time of low saving rates and stock market volatility.
Despite the government’s decision to introduce a number of measures to curb the growth of buy-to-let landlords, including several tax changes such as the phasing out of landlords’ mortgage interest tax relief, many people believe that buy-to-let remains an attractive income investment, with plenty of demand from tenants and healthy rental yields still achievable.
This is something we feel will continue into 2018 as landlords prop up the rental sector due to the shortage of housing accommodation.
Those who invest wisely should benefit hugely from what we believe will be a buoyant housing market over the next 12 months.
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