Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. With 2018 in full swing, we look at what is happening with the UK property market. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
What’s happening in the UK Property Market?
The latest figures released by Nationwide indicate that annual house price growth has slowed during the month of May, dipping slightly to 2.4%, down 0.2% from April’s growth rate of 2.6%.
The average house price in May came in at approximately £213,618, up only marginally from April, where the average property price was £213,000.
While growth remains on the lower end of Nationwide’s housing price prediction for 2018, their forecast remains true: annual growth demand remains in the 2-4% range.
As ever, changes in the market are always contingent on the state of the wider economy, which continues to be muted. However, experts anticipate house prices to grow 1% in the final half of the year.
Shift in the market
The newest data from the Ministry of Housing, Communities and Local Government reveals that there has been a shift that has taken place over the last 20 years in England’s housing stock.
Overall, the number of residences has increased 16%, from 20.6 million to 24 million. But there have been major changes concerning the ownership of inventory, affecting the popularity of certain property types – private landlords are now scooping up a large percentage of the properties available.
Private dwellings now account for 20% of the total available stock on the market – double the amount recorded in 1997. Within the last 10 years, the private rental sector has experienced the biggest surge of growth, with the number of privately rented dwellings increasing 50%.
This means that there has been a decline in the amount of homeowners, from 68% to 63%; the number of owner occupied residences hovering around 15.1 million for the past decade.
The amount of social landlords have also been impacted – down from 22% to 17% overall – although the number of dwellings has increased 2% over the last 10 years.
Appealing Properties
It’s important to remember that there are many things that will influence the popularity of the types of properties on the market, but those favoured by investors will likely make an impact.
Flats on the rise
With this in mind, it is easy to see why the demand for flats has risen. A whopping 60% of flats are privately rented, compared to 18% of other property types. Over the last 20-plus years, the inventory of flats has risen to 15.6% from 12.2%, due largely to the sheer volume of new buildings being built.
Houses have come back into favour recently, but flats still made up 20% of new units available last year.
In fact, their stock has almost doubled (from 4.9% to 9.2%) since 1996 – adding one million more flats to the market.
Safe as houses
Interestingly, terraced houses are also experiencing a surge in popularity, with their portion of the market sitting at 8.9% of total properties available. The number of owner occupied terraced houses has fallen, indicating their cross over to the rental market.
Bungalows, however, currently make up just 8.6% of the stock available, which may come as a surprise asthis property type is favoured by the older generation.
If you’re in the market to buy or sell property this year, check back here monthly for our property price update, or contact an advisor for personalised advice.