Homeowners have reason to be optimistic as Hometrack, a well-known property analytics company, predicts house price growth of 3% in 2018. Those in the UK's top 20 cities have even more reason to cheer, as they have been forecast 5% growth.
This is in line with Hometrack's projection for 2017 of 4% growth due to a pick-up in regional housing markets offsetting weak price growth in London. Richard Donnell, Insight director at Hometrack, said: "Large regional cities could register house price rises of up to 25% over the next two to three years. The likes of Manchester, Birmingham and Glasgow have seen market activity increase and this has delivered above average price growth of 6-8% for the last 12 months."
In contrast, while London has seen a 70% increase in house prices since 2009, Richard points out that it "is facing a drawn-out period where house prices and earnings need to re-align – we expect the rate of house price inflation to remain in low single digits over the course of 2018 with prices falling in real terms."
Hometrack further predicts that housing sales will remain at around 1.2 million in 2018, unchanged from the last three years, but that first-time buyers will be making up the largest proportion of this. Currently, existing homeowners make up the largest group, but first-time buyers are expected to overtake them, at 35% of sales compared to homeowners' predicted 34%.
Meanwhile, investors buying with a mortgage are forecast to see a fall in sales of 6% due to tax changes and low yields impacting buying power in southern England. Lastly, rents are predicted to rise by 2%, down slightly from the 3% growth seen over the last three years.
Homeowners may be able to benefit from the increased worth of their house by remortgaging to a lower loan-to-value deal
All those first-time buyers looking to step onto the housing ladder next year would also do well to look at the Best Buy mortgages to try and minimise their repayments
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