The property market is predicted to rise over the next four years, with the average house price reaching £220k by the end of the year. Economists say that despite Brexit negotiations stalling house price growth, prices are still £9k higher than they were last year. They predict an average home will cost £272k by 2021.
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Landlords Leaving the PRS
A government crackdown on buy to let landlords has caused many to pull out of the private rental sector. Landlords are facing a loss of mortgage interest tax relief and higher stamp duty land tax. These changes mean buy to let is no longer such an attractive investment option, especially for landlords with heavily mortgaged properties.
Affordable Properties in Short Supply
The end result is a lack of interest in the property market, with fewer landlords willing to invest in property. Despite this, affordable properties are still in short supply and many local authorities are struggling to find suitable accommodation for the vulnerable tenants on their books. In previous years, private landlords made up the shortfall in housing stock, but many landlords are no longer willing to let to tenants in receipt of benefits.
It’s a difficult situation, not helped by rising inflation, which is denting consumer confidence.
House prices in London are still the highest of any region in the UK. There, foreign investment continues to drive up property prices. Even so, the market for high-end properties has slowed down and many developers are turning to other areas to make their money.
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