2018 is already a year of change in many ways, not least for homeowners, first-time buyers and property investors. From the economic uncertainty of brexit to rising interest rates, what are the key factors that will affect housing this year?
Rising Interest Rates
Although not a big climb, the Bank of England’s Monetary Policy Committee raised the base interest rate from 0.25% to 0.5% earlier this year. It is suggested that there could also be another possible increase at some stage.
Rising interest rates will affect borrowers on standard variable rates and tracker deals, with those on a £175,000 tracker mortgage due to see £22 added to their monthly repayments if the base rate increases to 0.75%.
Government policies are helping to drive a new wave of housing development, with 217,000 homes coming onto the market in 2016-17.
Up 20% on the previous year, there are also several indicators that suggest the numbers will continue to improve in 2018.
The Impact of Brexit
There are conflicting reports on how Brexit may affect the housing market this year, but the general uncertainty surrounding the issue may have an impact on consumer behaviour
But the uncertainty surrounding Brexit could very well have an effect on consumer behaviour, which means another unpredictable year in store for homeowners and first-time buyers.
Buy to Let Changes
Along with the next stage in the reduction of tax relief, two more big changes are coming for landlords.
From April onwards, all landlords of Houses of Multiple Occupation will require a license, previously only applied to those with property housing 5 or more unrelated occupants.
April will also see the introduction of new rules on Energy Performance Certificates (or EPCs), meaning it will now become unlawful to let or lease a residential or commercial property with an EPC rating of F or G. This may cause problems for landlords letting out a property without the required rating.
Government Housing Policies
The abolishment of stamp duty for first-time buyers on properties valued up to £300,000 will help those looking to take their first step on the property ladder.
The Help to Buy Equity Loan was also boosted in the budget with an extra £10bn of funding, and young savers can continue to take advantage of the Help to Buy ISA which boosts savings by 25% on monthly deposits of up to £200.