March 15th, 2017.
How Will Property Prices Change in 2017? The Experts Reveal All
The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA) have released their predictions for the UK property market in 2017. I take a look at their forecasts and what these mean for property investors and developers.
There Won’t Be ‘Extensive’ Growth in 2017
The NAEA has predicted that there won’t be ‘extensive’ house price inflation during 2017 and the number of transactions will remain steady. Its research has found that 43% of its member agents believe prices will stay the same and therefore there will be a rise in first time buyers rather than investors and developers purchasing properties new and old.
The NAEA has also called out the government on its seemingly false promises for new builds saying:
‘We need to see these promises converted into bricks and mortar for a better housing market for all’
Therefore, there is clearly demand for new homes to be built and ample opportunity for developers to sell or rent their completed properties.
Things are less steadfast when it comes to rental properties. The ARLA has stated that the number of rental properties coming onto the market will fall next year – 37% of agents agree. This will be as a result of the April 2016 increases on stamp duty for additional properties.
Despite this, 52% of its member agents expect rent prices to increase in 2017 thanks to a shortage of stock and pressure from bans on letting agent fees. It believes demand will continue to grow and the market will become more competitive than ever.
David Cox, Managing Director at ARLA, said:
“Our private rented sector report findings over the past few months have been positive and we were confident approaching the end of the year. However, following the announcement of an outright ban on letting agent fees during the Chancellor’s Autumn Statement, we expect rent prices to rise and tenants to be forced to look for properties in cheaper areas.”
What Does This Mean for You?
The experts believe there will be less investors purchasing property in 2017 and this certainly lines up with our previous post which writes about how buy-to-let changes could see a rise in HMOs entering the market as landlords choose to develop current properties rather than extending their portfolios.
However, this doesn’t mean buy-to-let investment will come to a screeching halt. There are still plenty of great opportunities out there for experienced buyers who know what they’re doing.
As the ‘NAEA And ARLA Share Property Predictions for 2017’ report says:
‘Due to the rise in landlord taxes in 2016, landlords may be forced to sell some or all of their buy-to-let (BTL) properties and exit the market. For prospective new investors, it will be more difficult obtain BTL funding in 2017, as lenders up their criteria.’