PropertyInvesting.net: property investment ideas, advice, insights, trends
Propertyinvesting.net: Property Investment ideas, advice, insights, trends

PropertyInvesting.net: Property Investment News

 Property News

more news articles...

House price growth to drop off this year, according to Cebr


04-08-2017

Helen Cahill
I report on retail and property for City A.M. I have covered the investigation i [..] Show more
Cornish Town Holds Second Home Referendum
Tax changes have dampened the market (Source: Getty)

House price growth will drop off this year, with forecasts suggesting the sluggish growth will continue until 2019.

According to analysis by the Centre for Economics and Business Research (Cebr), house prices will rise 4.4 per cent this year, as the property market puts on a "steady if unspectacular" performance. Last year, house price growth was 7.4 per cent.

Read more: London has fallen out of the top 50 global cities for house price growth

The average UK house price is expected to grow to £220,000. But Cebr said "substantial risks" to house price growth remain.

"Rising inflation in combination with stagnating wage growth has led to a halt in real income growth," Cebr said. "This will hurt consumers' disposable incomes and put a dampener on housing demand in 2017 and 2018."

Next month, measures will come into effect that will stop buy to let landlords fully deducting mortgage interest payments from their tax bill. Cebr said these changes will "significantly" reduce the number of buy to let landlords snapping up properties.

Buy to let investors have already been deterred over the past year, following a three per cent hike to stamp duty on second homes. The combination of different government measures against buy to let landlords have "taken the steam out of the market".

"The increase in stamp duty on second homes...led to plummeting transaction numbers in the subsequent months which have still only partly recovered," Cebr said.

Jeremy Duncombe, director of Legal & General's Mortgage Club, said: “Today’s figures from Cebr should actually be welcome news for the housing market, showing that house prices are finally starting to rise closer to inflation.

“The fact that house prices are continuing to increase during uncertain economic times reflects the unfaltering confidence in brick and mortar and the nation’s desire to own their own home."

Low mortgage rates are making it cheaper than have to borrow on a home, but they also mean it is becoming more difficult for first time buyers to save for a new home. The cooling of the buy to let market has, however, given first time buyers more room to breathe when it comes to purchasing a property.

www.cityam.com/

back to top

Site Map | Privacy Policy | Terms & Conditions | Contact Us | ©2018 PropertyInvesting.net