Following their property market round-up of 2017, NAEA (the National Association of Estate Agents) and ARLA (the Association of Residential Letting Agents) Propertymark are sharing their property predictions for 2018.
As we approach the New Year, there are a number of hurdles on the horizon, but scope to remain hopeful. With further interest rate rises expected, Brexit negotiations to overcome and the cost of living escalating, the property market could see significant changes.
NAEA and ARLA Propertymark offer their property predictions for the rental and buying markets:
ARLA Propertymark has its predictions and hopes for 2018:
- Almost three in five (59%) letting agents think that rent prices will rise next year, compared to just 19% who think that they will fall.
- Two thirds (62%) expect the supply of rental stock to drop next year, while 53% think that demand will continue to increase.
- Seven in ten (70%) expect private rental taxes to rise further next year, as agents start altering their business models to survive in the wake of the Government’s ban on tenant fees.
David Cox, the Chief Executive of ARLA Propertymark, says: “2017 was a big year for the lettings industry, and tenants felt the effects of this. Unfortunately, it looks like rising rent costs are going to continue into the New Year, as agents need to be moving into a 0% fee business model by October, which will push rents up, as the costs are passed through landlords and onto tenants. 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. While these policies will be developed rather than implemented, they should start to affect the market, as agents adapt their businesses in anticipation.
“In terms of the supply of rental properties, which agents largely expect to fall, we need to remember that the Minimum Energy Efficiency Standards coming into effect in the New Year could see up to 300,000 properties being taken off the market because they don’t reach the minimum requirements. This will also, in turn, push rent costs up.
“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.”
NAEA Propertymark gives its property predictions for 2018:
- Almost half (43%) of estate agents expect house prices to fall next year.
- The majority (44%) predict that supply will remain the same, while 29% think that it will drop. A third (32%) think that demand will decline in line with this, but almost half (46%) expect it to stay the same.
- A third (34%) forecast that incidences of gazumping will decrease in the New Year too, while the trend of renovating rather than moving is expected to continue, as 60% think that more homeowners will do this.
The Chief Executive of NAEA Propertymark, Mark Hayward, looks ahead: “It’s been a big year for the housing market, with the Government pledging to improve the house buying process and Stamp Duty relief for first time buyers coming into effect. However, looking ahead to next year, more than half of our members don’t think the first time buyer tax relief will have a real impact on the number of sales being made to the group. Further, agents expect supply to remain the same but demand to grow, which sounds like bad news, but, if we can improve the process of buying a property, we’ll be making vast improvements to the sector, which will ultimately make it easier and provide more certainty for first time buyers.
“Our members want to see Stamp Duty relief rolled out nationally to all buyers and hold out hope that housing stock will increase. This will be a case of wait-and-see – the Government has made many such promises in the past, which we’ve never seen translated into reality.”
Are your property predictions for 2018 similar to those of NAEA and ARLA Propertymark?