House price inflation will remain low and the number of transactions will remain steady in the year ahead, the National Association of Estate Agents (NAEA) has predicted.
The leading professional body for estate agents says that 43% of its member agents expect prices to stay the same, with a positive knock-on effect for first-time buyers. Almost a third (29%) of NAEA agents believe that more first-time buyers will get on to the property ladder in 2017.
While the NAEA welcomes the government’s support for first-time buyers purchasing new-builds, it believes there should be more of a focus on helping them to afford older ‘fixer upper’ properties, which it says offer better value.
Mark Hayward, managing director of the NAEA, says: “It would be an understatement to say this year has not gone as expected. However, the property market is mostly still feeling the effects of events that happened last year.
“The high-end London property market is suffering at the hands of increased stamp duty taxes and while Brexit uncertainty definitely hasn’t helped repair this, it’s not the sole reason why London’s more expensive properties aren’t being snapped up at the same speed they were.
“Next year, we expect it’ll be more of the same; there won’t be a ‘property Armageddon’, but things won’t get much better for first-time buyers and those looking to up or downsize.”
Rent price hikes
When it comes to the rental market, the Association of Residential Letting Agents (ARLA) predicts that there will be a drop in the number of rental homes coming on to the market in 2017. More than a third (37%) of ARLA letting agents believe that supply will fall, as April 2016’s stamp duty surcharge on additional properties continues to deter would-be property investors.
More than half (53%) of ARLA agents expect rents to go up in 2017, blaming this on lower stock levels, cuts to mortgage interest relief and the ban on letting agent fees.
ARLA predicts that demand will continue to rise but there will be fewer properties available to tenants, as some landlords will sell up as a result of the recent tax changes. It says this will be made worse as tighter lending criteria will make it harder for new property investors to enter the market.
David Cox, managing director of ARLA, says: “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.
“The government continues to lash out against the private rented sector to cover its own failure to build the number of homes this country needs. Such policies will have a detrimental effect on the very people the government aims to help the most. As a result, we predict 2017 will be a raw year for renters. We now need stabilisation from the government before tenants are squeezed dry of every penny.”