UK Housing Market Update

December 2017

What the lead indicators tell us this month

December 2017, by Chris Buckle and Holly Titford

House price growth remains slow as outlook weakens

Summary

Annual house price growth remained stable at 2.5% in November according to Nationwide. Monthly growth slowed to 0.1%, continuing the trend of subdued increases that have characterised much of 2017.

The RICS continue to make a pessimistic assessment of market activity. The large majority of surveyors reporting falling numbers of enquiries remained the same in October as in September. But the majority reporting falling instructions increased sharply. More surveyors have reported falling demand than falling supply over the last three months, indicating a weak outlook for price growth. Indeed, the small majority anticipating price increases in September got smaller in October. Mortgage completion data showed a fall in transactions in September 2017 compared to September 2016, this drop followed three months of higher buying activity compared to the same period last year.

The pessimistic outlook amongst surveyors is matched by the OBR which currently predicts annual GDP growth of just 1.5% until 2021. In spite of these low forecasts the Chancellor loosened his fiscal stance in the autumn budget earmarking an additional £25bn of spending over the next five years. The most eye catching housing announcement was the stamp duty break for first time buyers purchasing a home worth under £500,000. This is likely to come at a cost of £600m a year to the exchequer and OBR forecast it will raise house prices by c. 0.3% given buyers’ new capacity to pay a higher deposit. For our response to the Budget see: http://sav.li/a34.

 

 



 

 

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Chris Buckle

Chris Buckle

Director
Residential Research

Savills Margaret Street

+44 (0) 207 016 3881