This week’s Tom looks into his crystal ball at the likely scenarios for the housing market in 2018.
1. I think the average purchase price for first time buyers is going to go up by 10-15% because of the removal of stamp duty for first timers, the support from the government such as the help to buy, and the mortgage lenders are lending again. This has a knock-on effect as there will be more demand for more properties which always drives prices up.
2. I think landlords with larger portfolios will sell off some properties, so they have less properties with less mortgage after the reduction in tax relief on mortgage payments. Landlords with smaller portfolios will push the rental prices up as a result to try and recover the lost tax relief.
3. I think we’ll see a lot of small independent high street estate agents either closing down or being bought. With agency fees being driven down further and further by companies like Yopa and Pink Street, the high street agents are forced to compete. The smaller agents will struggle on two fronts… One, they won’t be able to bring on as many new properties because the public will not pay the higher fees anymore and will elect to go with other agents. Two, if they try to compete on price they won’t be able to generate the revenue without completely changing their entire business model, overheads, premises and staff. I think that will push a lot of them into trouble.