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. As we enter the final months of 2017, we discuss what is currently happening in the market and what we may see happen in 2018 and beyond. Our monthly Property Price Update gives you a summary of what the experts in the market 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 is happening with the UK property market?
The latest data released by Nationwide, shows that the annual house price growth has increased by 2.5% during October. This is compared to 2.0% for September.
The average house price for October was £211,085, compared to £210,801 for September. This equates to a modest 0.2% month-on-month increase.
The 0.25% interest rate increase, bringing it up to 0.5%, is set to have a modest impact on borrowers. The majority of new mortgages have been taken out on a fixed rate basis. The number of mortgages that are on variable rates is around 40%, this is down from 70% in 2001.
Migration is adding to housing demand growth
The UK has seen an explosion in the growth of its population. From 2001 to 2015, the population increased by 11%. Migration accounts for 60% of this, which equates to approximately 3.2 million people.
Those who have migrated to the UK tend to live in privately rented properties. Between 2011 and 2016, there was an increase of 1.5 million people who were privately renting. And, 0.6 million of these were migrants.
Those who migrated to the UK before 2001 now tend to be homeowners.
Migration has had the largest impact in London. 60% of private renters in the capital are from outside of the UK. This is compared to less than 20% in the North-East, North-West, Yorkshire & Humberside.
Predictions for the future
The future of housing demand is invariably linked to migration and the strength of the economy.
The uncertainty that continues to exist around Brexit, is expected to mean a slowing in migration, and because of this a slow-down in the demand for housing as well.
Keep an eye on our monthly Property Price update, particularly if you are planning to buy or sell your property soon.