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 last quarter of 2017, we turn our attention to what we can expect to see happen over the coming months. 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 UK property prices?
Recent data supplied by Nationwide shows that the average property price at the end of September stood at £210,116. This is marginally down on the previous month, where the average price as £210,495.
The annual house price growth has stabilised at 2.0%, compared to 2.1% in August.
The data shows that London was the worst performing region in terms of property price growth. In fact, house prices in the region have fallen by 0.6%. This is the first fall in annual terms for eight years.
Historic events still impacting the housing market
The demand for housing is partially being driven by low mortgage rates and the healthy UK employment market. However, the heightened pressure that households are facing on their income and political uncertainty centred around Brexit is putting restrictions on the housing market.
Predictions for the next quarter
At its last meeting, the Bank of England’s Monetary Policy Committee (MPC) suggested that if the economy continues to evolve in line with expectations, then an interest rate rise may be on the cards in future months.
This will be the first increase for 10 years. Experts are predicting that the (MPC) may increase the rate by 0.25% to 0.5%. Commentators say that future rate increases are likely to be gradual and limited, with it increasing by 1% over a five-year period.
An increase of 0.25% is likely to have a modest effect on borrowers. In the last few years, most mortgages have been taken out on a fixed rate basis. For those who are on variable rates, they may see their mortgage payments increase by £180 per year.
Whilst an increase will be welcomed by some savers. Households, who are already struggling financially may be less welcoming of the rise.
Figures published by Nationwide show that the average property price for August was £210,495. This is a small drop from July, where the average property price was reported as being £211,671.
The annual house price growth stands at 2.1%. This is compared to 2.9% for July.
The slowdown in the annual growth figures to 2-3% from 4-5% seen during 2016 shows that the housing market and the wider economy is going through a period of ‘cooling’.