2016 was an interesting year for the UK Housing Market. Two major influences were Stamp Duty changes and the EU Referendum result.
The Stamp Duty changes, which were introduced two years ago, had already started to have an impact at the top of the market where the upfront costs of buying a property had substantially increased. Then there was also a Stamp Duty change for the purchase of second homes introduced in April.
Right from the start of 2016 there was uncertainty triggered by the Brexit poll, which caused much uneasiness in the housing market.
Here we provide some key details from 2016’s property market and what may happen in 2017.
The official house price index that was re-launched in June by the ONS stated in October that across the UK, house prices were up by 6.9% year-on-year, which was the lowest figure since the end of 2015. The average price was £217,000. In 2017, RICs predict a 3% growth for the year (a 50% fall approx.).
In 2016 the year started off slowly. Sales of homes above £1million were affected by the Stamp Duty changes at the end of 2014 and uncertainty around the Referendum didn’t help. Since the Referendum result, estate agents also reported that there was an increase in enquiries from overseas buyers due to the weak pound. Savills predicts no luxury price growth for London for 2017 and that it will continue to flat line. However, overseas buyers will continue to look to the UK for properties, with UK domestic buyers who previously thought they couldn’t afford to buy in London and the surrounding areas may now take another look.
In 2016 some parts of the country saw a flood of properties coming into the market and the balance tipped in favour of tenants, with rents, particularly in London falling. In November the average rent was 0.7% lower than 2015 and saw the biggest fall in six years. However, Savills expect rents to rise by 2.5% across the UK and 3% in London in 2017.
North South Divide
Growth that was mainly driven by the South in 2016 will change in 2017. Predictions are that; East Anglia will see higher growth than the UK average, plus the East Midlands and North East will also outperform.