Government inaction on the housing market will put the brakes on price growth next year, an agent has claimed.
Jackson Stops is predicting that house price growth will remain flat in 2018 due to punitive Stamp Duty levels and continuing economic and political uncertainty.
The national agent is expecting little price change in the capital for purchase and rental prices.
It is also claimed that a “magpie market” is emerging for rentals in London, where tenants are prepared to part with more money for new and shiny well-located, exceptional quality homes, leaving older homes vacant and pushing up rents as landlords struggle to fill those properties.
Country branches expect to see sustained growth in the middle market for homes valued at £500,000 to £1m, with some branches in the West Country predicting prices to increase by around 4% in 2018. In the South-East, overall sentiment from branches points to prices remaining stable.
Nick Leeming, chairman of Jackson-Stops, said: “Prohibitive levels of Stamp Duty have been a real drag on the UK property market over the past financial year, and although the Treasury will be pleased to see receipts have generated £8.6bn in revenue on residential transactions, sales levels fell by 8%.
“This fall in market activity can no longer be ignored and the Government must view the property market through the eye of the home owner – particularly now the Bank of England has announced an interest rate rise. Traditionally, higher interest rates mean higher mortgage rates, so if buyers weren’t already acutely aware of the costs associated with moving, they will be now.
“With the Budget just around the corner, the majority of our branches hope for, but do not expect, Philip Hammond to address Stamp Duty reform, particularly at the top end of the market. If Stamp Duty levels weren’t causing so much harm to the £1m-plus market nationally, I think we would see an increase in liquidity at all levels.”
Leeming added that more help was needed for those moving up the housing ladder rather than just first-time buyers and called for housing minister Alok Sharma to resurrect the Housing White Paper if Chancellor Philip Hammond doesn’t take any action in next week’s Budget.
Comments (3)
Fly on the wall at the Treasury:-
Civil servant (CS) ‘Phil…we have lots of people struggling to buy and move because of the associated costs of moving. Someone on Twitter is upset and they have tweeted Donald Trump and more dangerously Daily Mail and Daily Express’
Phil Hammond (PH) replies ‘that’s outrageous, we can’t have that, quick speak to the Ministry of Administrative Social Media replies and say we will slash everything’
CS ‘But Phil it raised £10bn of taxes last year!!
PH Cancel that last request and send in our top strategy team, how about the Ministry of Brexit affairs?’
CS Great idea Phil. Oh no, Jeremy Vine has heard and he’s on the phone asking for his friends in Middle Englandshire!!! What do we say?
PH ‘Lets have a referendum, but beware the law of unintended consequences!!!!! What does Theresa May say?
CS ‘She’s not at work today, has a nasty cough brought on by some European flu!’
My sarcastic point on the stamp duty argument is if you sit in the Treasury, stamp duty raises a lot of money that will be needed for our future Brexit divorce costs, and is seen as a tax on the privileged i.e. those able to afford to buy a house. However, if you bite the hand of the property owning democracy, you will suffer! You kill ambition and there is so much that is linked to the property market.
Back in the real world, that’s killed some time whilst I’m waiting to hear about 2 exchanges..1 is happening, the other can’t as the solicitor has gone on holiday and forgot to report to his clients, despite setting today as the deadline. Taxi
House price growth being flat can only be a good thing, the reality is prices have been coming down in the south east and are likely to dip further and possibly spread further afield. The damage stamp duty is doing to the volume in the marketplace however is well documented. Local to me, rents at the lower end are stable as we’ve already seen some landlords offloading their buy2lets thus less choice. The larger family homes have taken a battering on price, my suspicions why confirmed by a removal firm I know well who said they’d been kept busy by all the people returning to Europe, but domestic residential was a disaster.
Can someone explain what is meant here please?
“It is also claimed that a “magpie market” is emerging for rentals in London, where tenants are prepared to part with more money for new and shiny well-located, exceptional quality homes, leaving older homes vacant and pushing up rents as landlords struggle to fill those properties.”
Rents are rising as landlords are struggling to fill properties?