Let’s face it, accurately predicting the future of the property market is not an easy task. Many of us are aware that when it comes to this industry anything can happen. For a number of years the market was at a high with property prices booming, but as we’ve witnessed, a political or economic turn of events can influence the actions of buyers and sellers. In this blog, our West Wickham Partner, Charles Proctor uncovers the truths about 2017, with a glimpse at what might shape the market in 2018.

Taking stock of the situation
We currently have more housing stock available than we’ve had since the end of 2010. On the upside, the past couple of months have been positive, with a good number of properties exchanging contracts. The weekend before the Autumn budget was announced, we agreed the sale of a flat in Bromley to first time buyers at £340,000, who will now be paying £2,000 stamp duty rather than £7,000. Two weeks ago we agreed sales on four properties between £325,000 and £550,000. None of these were to first-time buyers, although two of the chains have a first-time buyer at the bottom. The weekend after the budget we also had a first-time buyer approach us for the second time, to increase her offer on a flat in Shortlands by £5,000. 

This has been very encouraging and highlights there are buyer’s looking for a home, regardless of the time of year or political situation.

Pricing it right
For 2018 if more buyers come to the market and the supply of properties reduces, this will help prices remain stable. On the flipside, a lack of buyers will keep the status quo and prices are likely to reduce further – although this will be dependent on where properties are (i.e. near schools and stations). Personally, I am optimistic we will see more buyers coming to the market next year and that prices will remain unchanged.

The market definitely won't be booming, but equally I don't feel it will shrink dramatically either. It will come down to sellers being realistic with their asking price to attract buyers, as well as the location of the property.

Schools and transport are key to attracting buyers
If properties are in school catchments and near stations with good links to London, they will probably receive a greater response next year from buyers and prices are likely to remain stable. Nationwide Building Society House Price Calculator suggests prices have reduced by 0.63% in the last year (in Greater London), although I suspect in reality the figure is more likely to be minus 3-5%. However, with some properties coming to the market with unrealistic asking prices and lots of price reductions in the last six months, it is difficult to know the true level.

Incentives for buyers
We all understand how difficult it is for first-time buyers to get a deposit together for a property, however, for those who do have the funds, I think the change in stamp duty will give them a greater incentive to buy. With interest rates going up by 0.25% (back to where they were for eight years before the reduction in the summer of last year), I think this will encourage other purchasers to buy in 2018 and fix a good mortgage rate. The Bank of England has indicated there could be a couple of further rate rises over the next 2-3 years. It will be interesting to see if this happens and whether the economy is strong enough to take further rate rises or indeed if they will have to reduce rates again in the future.

An optimistic outlook
Overall 2017 has been a better year than expected, although much harder work with commission rate pressures and fewer buyers. I am quietly optimistic for next year. I sincerely hope we don’t have another general election, as they never benefit the property market and it is noticeable that the market became more difficult following the election this year. I feel there has been enough activity in the closing weeks of 2017 to give us confidence as we move into the New Year. Last year, following the referendum, the market between £300,000 and £700,000 was extremely difficult in the second half of the year, however, there is more activity at these levels currently, which can only be good for the whole market moving forward. 

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