Yahoo Finance House price growth expected to flatline next year, says Rics
House price growth will grind to a halt in 2018, according to the Royal Institution of Chartered Surveyors, amid a toxic cocktail of low levels of sales and homes on the market, as well as cautious buyers.
It said that while average growth was likely to be flat across the UK next year, more active markets in some regions will offset declines in London and the South East.
Rics added that issues that plagued the market this year such as estate agents' stock being close to record lows will continue into next year. But this lack of supply of homes for sale will stop outright falls in house prices, it said.
The low level of new buyer inquiries and sales volumes, particularly in recent months, means that activity in the market is subdued and lacks momentum for next year. The number of homes sold next year is forecast to be flat on this year or drop slightly, at around 1.2m; it has plateaued since 2014, and has not yet reached the pre-crisis high of 1.7m.
Tarrant Parsons, an economist at Rics, said: "A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts. Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.”
Rics added that many of the measures announced in the Budget to help ease the housing crisis and get more homes built will not come into effect until 2019-20, and said that there is scepticism over whether they will actually help.
The cut to stamp duty for first-time buyers, for example, may help improve affordability slightly, according to Rics. But it will have a "minimal impact in lifting home ownership rates", due to higher prices offsetting any saving in tax, and is "unlikely to stimulate activity to any great extent".
Meanwhile, Halifax forecast that average house price growth across the UK will stay low, between 0pc and 3pc by the end of next year.
Rents are forecast to rise by just 1pc as supply falls short, with mortgage approvals for landlords down as they deal with 3pc more stamp duty and the prospect of the withdrawal of mortgage interest tax relief, which is being phased in by 2022.
In the 12 months to November, rents grew by 0.7pc across the UK, according to Homelet, which was boosted by the East Midlands where they soared by 4.4pc.
