At the beginning of the year, we posted our predictions for how the UK property market would perform in 2018. Now we’re six months into it, it’s time to see how the market is actually doing.
Back in January, we said what we expected to happen in the property market this year. So far we’ve been right on some of it, but a few things surprised even us! Here’s what things look like at the halfway mark of 2018:
The South is slipping as The North rises.
In January we said house prices would fall in London, but rise everywhere else. We were pretty much on the money with this one.
By March, average house prices in London were down 0.7% compared to 2017 figures.1 That’s the biggest fall since 2009 when the capital was in the grips of
a financial crisis.
The London price drop is part of a developing trend showing signs of slower growth in the South, especially along the coast. Cities such as Portsmouth, Bournemouth and Southampton are growing slower than recent averages.
Bristol has consistently topped the property price growth charts over the past five years, but there are signs it is slowing too. Considering Manchester is currently in the lead with a growth rate of 7.7% perhaps we’re likely to have a new leader in the North by the end of 2018.
As we predicted in January, cities further north are on the rise. In addition to Manchester, places like Birmingham, Leicester, Nottingham, Cardiff, and Sheffield are all showing price growth above the average.
London prices are still high despite the 2017 slump.
Despite the downturn in the capital at the end of last year, London isn’t exactly in freefall. First-time buyers there are still paying double the average house price in the rest of the country to get on the property ladder.2 The fact that London prices have increased by 40% in five years – while wages have barely moved at all – helps explain why.
Confidence in recovery is growing.
Despite the slight setback in market growth last year, confidence in the market is up! According to Zoopla, homeowners expect property price inflation to go up from 4.2% to 6.9% within the next six months.3 That would be the largest increase in two years and take the numbers back up to the average over the past five years.
More than 80% of homeowners expect house prices to grow where they live. That’s a 14% increase since last November and the biggest surge in confidence in two years.
People in the East of England and East Midlands are the most optimistic in the country about the local property market, whereas those in the North East are the least optimistic.
That optimism isn’t based on speculation, though. The most recent price index from Hometrack shows city house prices have gone up 2.9% in the last three months.4 Considering they were in a 0.5% decline by the end of 2017, that’s a positive step forward.
Where we stand for the rest of the year.
So as it turns out, it’s not all doom and gloom in the UK after all. Although it’s not great news for London and the South, the rest of the country is showing signs of good growth.
It’s been a shaky start to 2018. We’re not out of the woods yet, and there is still a lot that can happen. But there seems to be a little more optimism than we all initially expected. Perhaps it’s because so far there have been no surprises like an unexpected snap election. And now that Article 50 has been triggered and we finally have a date for Brexit, there is less uncertainty.
Whatever happens, one thing’s certain: come January 2019 there will be a lot more to talk about.
The best time to sell is different for everybody. If you’re thinking of putting your property on the market, your local Hatched estate agent can give you an accurate property valuation based on both national and local markets. If you want to know the full property picture before deciding an asking price, book your free, no obligation now.
 Hometrack UK Cities price index April 2018