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.
ARLA Propertymark’s predictions and hopes for 2018, from David Cox, Chief Executive:
1: Almost three in five (59%) letting agents think rent prices will rise next year, compared to just 19 per cent who predict they will decrease
2: Two thirds (62%) expect the supply of rental stock to fall in 2018, while 53 per cent think demand will continue to rise
3: Seven in ten (70%) letting agents expect private rented 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, Chief Executive, ARLA Propertymark, said: “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’s predictions and hopes for 2018, from Mark Hayward, Chief Executive:
1: Almost half (43%) of estate agents expect house prices to fall next year
2: The majority expect supply to remain the same in 2018 (44%) while 29 per cent think it will decrease. A third (32 per cent) think demand will decrease in line with this, but almost half (46%) expect it to stay the same
3: A third (34%) expect incidences of gazumping to decrease in the New Year too, while the trend of renovating rather than moving is expected to continue as 60 per cent think more homeowners will do this.
Mark Hayward, Chief Executive, NAEA Propertymark said: “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 FTBs coming into effect. However, looking ahead to next year, more than half of our members don’t think the FTB 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 FTBs. 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.”
