YOUR GUIDE TO THE MARKET IN 2017 . . .
Those whose New Year’s resolution is to move home should start to plan their strategy. Buyers and sellers will have to work harder to cut the best deals in what experts forecast will be an uncertain market in 2017. Traditional predictions about house prices are little help because pundits agree that Brexit uncertainty and low wage rises for many mean values will increase by no more than two per cent on average this year — and may even stagnate. That isn’t to say there won’t be bargains and hotspots, but canny consumers will have to get timing, pricing and marketing dead right to find and take advantage of the best deals. here are six factors to consider: AskiNg prices will be ‘soft’ — and open to negotiation: Consultancy JLL says the number of house moves in 2017 will drop 11 per cent compared with 2016, while estate agency savills forecasts a 17 per cent fall as economic worries lead householders to stay put.
sellers will have to be more realistic on values to tempt the relatively few serious buyers. Canny buyers should research sellers’ circumstances, too.
For example, estate agency strutt & Parker says a quarter of movers aged 40 to 59 want to free capital to help their children buy a first home. such sellers may be more willing to strike a deal.
LoNdoN prices are set to fall: The office for National statistics says an average home in the capital now costs £474,000, which is simply unaffordable for many buyers — as a result, sales have slumped, with agent Foxtons reporting a 10 per cent drop in transactions over 2016.
‘ We’re entering a prolonged period of stagnation,’ says Becky Fatemi, of London estate agency Rokstone. To make matters worse, sales of the most expensive homes have been hit by high stamp duty (£ 43,750 on a £ 1 million property, or £73,750 if it’s a second home). For sellers this is bad news, but in a buyer’s market it could mean bargains.
home Counties will boom further: search agency stacks says more Londoners are cashing in properties before prices in the capital slump further. ‘ They have a once- in- ageneration opportunity to swap a moderate London property for a spectacular rural home,’ says stacks’ James greenwood.
most Londoners move to within commuting distance of the capital, so popular locations are set to boom further. Last year, savills surveyed 100,000 house sales
close to 314 stations and found that for every minute’s journey time closer to the capital, the average price of a home rose by £3,048.
oLd houses might lose out to newer ones. estate agents say high- maintenance older homes — once the most wanted in Britain — are no longer top of the tree, especially since incentives such as help To Buy have been linked to the purchase of new-builds.
‘in 2017, modern houses are anticipated to be the most popular types, with cost, comfort and low maintenance overriding the traditional beauty of listed homes,’ says Nick Leeming, chairman of Jackson-stops & staff estate agency.
BuY to let heads north: New rules from April will cut mortgage interest tax relief for landlords on higher incomes, while mortgage lenders now have tougher rules so borrowers must prove they could repay a loan even if interest rates soared to 5.5 per cent.
meanwhile, the rental income each month must be at least 145 per cent of the mortgage payment. it will, therefore, become harder for the figures to add up in the south, where house prices are so high that rental income may not be enough to cover mortgage costs.
‘We expect investors to reduce mortgage debt and buy more for cash or with smaller mortgages in higheryielding locations such as manchester, Leeds and Birmingham,’ says stuart Law, of property investment consultancy Assetz.
Time to buy a bolthole: A uk holiday home may sound like a luxury, but it could be this year’s big earner.
surveys from economic consultancy PwC, online lettings firm Cottages.com and Barclays Bank show that up to 76 per cent of Britons plan a uk holiday in 2017. it’s because foreign breaks are up to 20 per cent dearer since last summer thanks to the falling pound.
A boost is likely for the selfcatering rental market, with Cornwall, scotland, Wales, devon and Yorkshire the most popular destinations.