An end of year analysis of the UK housing market shows that for 2017 property sales values and asking prices in England and Wales declined on average by 3.86%. The gap in ask-to-selling prices grew to 0.32% compared to the year for 2016 in a report by Zoopla. Also slowing are rates of increases in rental prices across the UK.
When it comes to getting your asking price the best location is in Bristol with an average of 1.9% lower price adjustment to close the sale. Homes in the south east had a better chance of selling at their asking prices with a reduction on average of 3.06% whilst Wales an adjustment for lowering the asking price was at 5.87%.
Lawrence Hall of Zoopla explains the findings:
“It’s unsurprising that properties in the south of the country are currently selling closest to their original asking price, as demand for homes in the capital and its surrounding commuter belt remains high.
“However, it's interesting to note that these same areas are the ones that have seen sale values slip furthest from the asking price over the past year, which is perhaps reflective of a slight slowdown in market activity in and around London.”
Other market locations including Coventry and Sheffield have seen average homes sell 2.09% and 2.07% less respectively in the original asking price. Homes in Bradford, Yorkshire have the highest reduced price with reductions averaging 6.32% off the original asking prices. Others locations include Preston in Lancashire at 6.24% and Swansea on average seeing a reduction from original prices at 5.87%.
The London residential market had sales on average of 4.09% below the asking price for 2017.
Housing Market in 2018
Most housing market analysts agree that due to a number of factors, increased interest rates, property sales decline and Brexit the housing market could see a slow year in 2018.
Russell Galley, managing director of Halifax states to Zoopla:
“We expect national annual house price growth to stay low in 2018, in the range of between 0% to 3%. The main driver for this forecast is the continued effects of 2017’s squeeze on spending power, as inflation has outstripped wage growth. Also, the uncertainty around the prospects for the UK economy next year.”
“The imbalance between supply and demand continues. On the demand side, new buyer enquiries have been weakening. And on a regional level, this measure has deteriorated far more sharply in London, the south east and East Anglia compared to other parts of the UK.”
“On the supply side, new instructions have held broadly stable. However, the latest data shows the supply of homes for sale sharply deteriorating. There is little reason to expect any fundamental shift in the key housing market drivers in the immediate future.”
Rental growth has shown signs of slowing with average rents rising in the UK at the close of November 2017 at 0.7% making the average monthly rental rate of £904.
PropertyWire reports that rents in London declined by an average of 0.2% year over year in November 2017 to a monthly average of £1,530 with an increase month on month of 1.7%.
The report states:
“The East Midlands, Northern Ireland, the South West of England and the North East of England all recorded annual rental price inflation in excess of 3% during November. But as well as London, the East of England and the South East of England saw rents fall.”
“On a monthly basis, comparing November to October, average rents fell in 10 out of 12 regions of the UK last month, with only the South West and the North East in positive territory.”
“The data also shows that last month’s 0.7% rate of annual rental price inflation compares to an average of 2.8% in November 2016, some four times’ higher.”
The largest annual growth in rents were in the East Midlands with an increase of 4.4% making the average rent of £615 monthly.
Rents for Northern Ireland saw an increase of 3.3% to £621 year on year but with a decline of 0.6% month on month. In the South West rental rates went up 3.4% to £802 with a month on month increase of of 1.5%. The North East averaged a year on year increase of 3.1% and month on month of 1.8% to an average rental of £533.
Scotland saw rental rates increase by 1.8% year on year to £620 with a decline of 0.2% for month on month. For Wales the average for 2017 increased by 1.8% also to £610 with a decrease month on month of 0.3%.
HomeLet’s chief executive officer, Martin Totty explains:
‘So far this year we have seen very modest rental price inflation. Rents are now higher than a year ago in most parts of the country, but there has been no return to the more rapid increases we last saw during the first half of 2016...’
‘HomeLet’s monthly data continues to support a picture of modest increases in rents over 2017 and in most instances, a reduction in real terms against the backdrop of underlying higher inflation.’
UK Rents For 2018
Predictions for the rental market are currently predicted to show increases in rental prices for 2018 in a report by Landlord Today.
‘Shortages of suitable properties to let and greater demand from renters will result in upwards price pressure in new letting asking prices in many areas, says the report from ARLA Propertymark (formerly the Association of Residential Letting Agents).’
‘Some 59% of agents expect to see rent prices increase next year, compared to just 19% who forecast they will fall.’
‘Almost two-thirds or 62% expect the supply of rental stock to decline in 2018, while just over half, 53%, think demand will continue to increase.’
Supply of rental properties is expected to decline in the opinion of letting agents due to new minimum efficiency standards being enacted in 2018 could place 300,000 property units offline for non-compliance which could raise the monthly rental rates.
David Cox of ARLA Propertymark says:
“There is a lot of other regulation making its way through Parliament next year, which will more positively affect the rental market however – including regulation of the industry, housing courts and longer-term tenancies.
“Overall, the industry is going through a seismic change and the lettings market we know today will be radically altered over the next five years. This change will be painful for agents, but we firmly believe that the industry will come out of the other end stronger, more professional and with a robust reputation among consumers.”