Forecasts suggest a possible price decline in London as well as economic slowdown putting a brake on the property market, the Guardian reports.
House prices are set to increase between 1 and 4%, according to Halifax’s annual forecast, indicating a noticeable deceleration from 2016.
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Although some experts suggest that slowdown in economic growth, possible rises in unemployment as well as pressure in household incomes may put a dampener on the property market after years and years of growth.
Prices will, however, continue edging slightly higher, mainly supported by low interest rates and subdued housebuilding. A rise of between 1 and 4% would suggest that an average British home would set you back £220,000 to £226,000 in 2017.
Whilst most forecasters agree with Halifax’s predictions, Countrywide estimates a fall of house prices of 1% in the coming year.
A third of Zoopla’s properties are currently showing reduced prices, indicating that nervous sellers are shaving off their asking prices to shift homes.
Prices for prime property in the capital experienced a drop of 6.3% in 2016, with no recovery in sight in 2017. As the main reason, Knight Frank blamed high levels of stamp duty (about £43,750 on a property of £1million) rather than Brexit for the recent decrease.
Tom Bill, Knight Frank’s head of London residential research, said: “Wider economic sentiment has been overshadowed by the UK’s decision to leave the European Union and the election of Donald Trump. However, the more mundane reality of fiscal policy remains the single biggest curb on demand in the prime London property market. In particular, higher rates of stamp duty are only now being more fully reflected in asking prices.”
