Let’s end the year on a high! House prices are up, if only just and there’s good news for first-time buyers.
Back in October, the BBC published a rather depressing report. “House prices in more than half of neighbourhoods in England and Wales are still lower in real terms than a decade ago.” they revealed. Up to 58% less in some areas. Added to the general gloom and doom of the Brexit negotiations, it wasn’t what most of us wanted to hear.
Here in the South East, house prices have in fact risen. And although the UK is still very much divided between north and south when it comes to house prices, overall across the UK, prices were up by 5% in the year to August 2017 and the market has been more robust this year than was predicted.
On Zoopla’s website they are recording:
“The average price for property in South East England stood at £416,084 in December 2017. This is a rise of 0.81% in the last three months (since September 2017) and rise of 1.84% since 12 months ago. In terms of property types, flats in South East England sold for an average of £243,845 and terraced houses for £306,503.”
And in 2018?
Early this week, Rightmove predicted that house prices of small and medium-priced homes around the country will rise by 1% in 2018 (albeit with a decline in London). That’s despite a slight drop in the average asking price in England and Wales between November and December this year.
Rightmove also predicts that the increase will be slightly higher (3%) for properties typically bought by first time buyers (i.e. two bedroom properties or less) and for properties bought by those moving on from their first home (2%).
Slow but still good news
There is no escaping the fact that an increase of 1% is pretty modest, but it’s worth considering the predictions from this time last year which were that the property market would stagnate and the picture would be a lot worse.
Incentives for first-time buyers
Announced in last month’s budget, the new stamp duty exemption for first-time buyers saw an instant flurry of new buyers making enquiries and registering with estate agents.
With immediate effect, the exemption abolished stamp duty for all properties up to £300,000 bought by first-time buyers. For those first-time buyers buying a property worth between £300,000 and £500,000, the new policy provides a £5k discount off stamp duty.
Despite more predictions of gloom, it remains to be seen what effect this will have on house prices, although some suspect that those who will benefit most will be those second-time buyers who are upsizing.
The stamp duty cut wasn’t the only measure in the recent Budget introduced to boost the property market which included making available £44bn of funding, loans and guarantees to boost the housing supply by 300,000 new homes a year by the mid-2020s.
It also shouldn’t be forgotten that there are still other resources available if you’re hoping to buy for the first time, including:
- Help to Buy with an Equity Loan. Save a minimum 5% deposit of the property value and the Government will offer an interest-free loan of a further 20%. The remaining 75% is covered by a standard mortgage.
- Help to Buy ISA and Lifetime ISA. I’ve written about these previously, and they are still a valuable resource. With the Help to Buy ISA, for every £200 you save into the account, the Government will add £50. This is up to a maximum bonus of £3,000 (which applies to £12,000 of savings). The Lifetime ISA offers a tax-free boost of up to £1,000 a year towards either buying your first home or saving towards retirement – and is available for savers aged under 40.
It’s always difficult to predict the property market but from an on the ground perspective here in the Dorking area, the situation does seem to continue to be reasonably dynamic. And if you’re thinking of buying or selling your first home in the foreseeable future, early in the new year could be the best time to capture some of the current interest and best deals.
So all that remains now, is for me to wish you a very Happy Christmas and New Year and I look forward to catching up with you in 2018!
Graham Faulkner is Branch Director of EweMove Dorking
He’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.
Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.