The UK property market ended last year with a stark shortage of homes for sale. This shortage has created a disconnect in demand that has been pushing home prices higher for the past two years. First-time home buyers are suffering the most, despite the Chancellor’s recent stamp duty break.
- A stark shortage of homes for sale forced prices up and created affordability issues
- The number of homes put on the market fell for the 23rd month consecutive month in December
- The Chancellor’s stamp duty break for first-time buyers has made little impact
- Estate agents are more optimistic about the property market going forward
The property market ended last year with meager momentum. First-time homebuyers and homeowners trading up to their second home were largely priced out of an extremely expensive market. As a result of diminished affordability, homeowners are staying put and first-time buyers are pushed into alternative options.
These market trends have been developing over the past two years. December was the 23rd month in a row that the number of properties put on the market fell. In addition, estate agents reported a decrease in new inquiries from potential buyers.
The Chancellor’s recent stamp duty break for first-time buyers has not made a noticeable impact. Nearly 9 out of 10 estate agents said they had seen no difference in response from first-time buyers since the change. About 66% expect the stamp duty break to have little consequence in the months ahead.
The UK property market ended last year in a tough spot, but estate agents expect activity to pick up in 2018. Home sales are expected to increase in all regions in the next 12 months. London recorded its first positive reading since June 2017.
Home prices are expected decline slightly in the next three months after a booming two years. The decrease in property value could be a boon for first-time buyers looking to break into the market.