by Housesimple on 3rd March 2017
Looking at UK house prices this month, it turns out we were right on the money with our January update predictions. Prices are looking slow at the moment, and what's more, The Guardian has reported that rents are expected to rise faster than home value in the next five years. But away from the doom and gloom there are some positive things to look forward to, especially the government's announcement of the Housing White Paper, which should provide the market with a much-needed boost.
Asking prices have become a little sluggish in these first few months of 2017, with growth at its slowest annual rate in four years. Tougher lending criteria for mortgages could be to blame, or we may be looking at a more inaccessible market due to the impact of inflation. With Brexit still spooking UK investors, many buyers might be holding back until there's more certainty about the real national impact of this impending change.
However, there's no need to worry: it's only natural that this year took a little downturn after last year's rush. Around this time 12 months ago the market boomed thanks to buy-to-let investors scrabbling to complete on their properties before the stamp duty increase. Now that this is over, it's quite normal to experience a lull.
The Royal Institution of Chartered Surveyors has predicted that rents will increase by over 25% in the next five years, while home values will grow less than 20%. The number of renters may be inching upwards, but supply isn't quite meeting demand. Landlords are scaling back their property portfolios so fewer rental homes are appearing on the market. With less choice comes higher prices, especially in prime rental hotspots like London.
On 7 February, the government released the exciting new Housing White Paper. This document sets our various schemes and plans that they're looking to try and use to help reinvigorate the market. According to this paper, around 250,000 new homes are needed each year to keep up with current demand.
To match these needs, the government will be creating a £3 billion fund to help smaller building firms get started. They're also looking to introduce a 'lifetime ISA' to help first-time buyers save up for a deposit and they want to reduce planning permission time from three to two years. There will also be a ban on letting agency fees, which should help young and new renters tackle some of the costs that tend to add up.
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