As 2016 prepares to close, many choose to reflect on the past and what is to come. And the growth of the housing market is not exempt from this analysis. As reported by the BBC, house price growth in 2016 was fairly stable. However, that growth is expected to slow as we enter 2017.
Even with the questions surrounding Brexit still looming, the latest House Price Index showed a growth rate of 4.5 percent for 2016. That is the same rate of growth as was experienced in 2015. Every region saw price growth, but East Anglia saw that largest jump at 10.1 percent. However, 2017 estimates are more conservative.
London House Price Growth
London tends to have an above-average performance compared to the rest of the nation. However, the market began to slow towards the end of 2016. In fact, the growth rate in London fell below the UK average for the first time since 2008. For 2016, London saw a 3.7 percent price increase, a marked difference from the 12.2 percent rate from 2015.
In a separate BBC report, mortgage lender Halifax believes a higher degree of economic uncertainty is in play. Not only has the London market been affected, but others are likely to follow.
That doesn’t mean losses are predicted. Instead, the low costs associated with mortgages today, along with a limited inventory, should support limited price growth. Halifax anticipates an increase between 1 and 4 percent by the end of 2017.
Nationwide mirrors the sentiment, anticipated slowed price growth, but growth nonetheless.
Uncertainty over the effects of Brexit, including questions about the labour market, leave many concerned. Additionally, multiple tax changes during the previous year impacted prices across the UK.
The larger question is will the low cost of mortgages coupled with a limited supply keep the house prices moving up, or will economic uncertainty bring them down. Some believe that question will be answered in early 2017.
Buying or Selling in Today’s Market
With so much uncertainty, it’s no surprise that many will have trouble deciding if now is the right time to buy or sell. In some cases, other forces are at play. If you have to relocate for employment, for example, selling might be your only option. And, in contrast, those who have saved and planned to buy will likely move forward. But anyone on the fence might be paralyzed by circumstance.
Ultimately, there is no guaranteed way to know whether selling or buying is the right move. Each person needs to examine their own situation and use their own judgment to decide. Consider the affordability of your current mortgage or rental payment, your amount of available savings, the likelihood that you will need to relocate in the near future, and job security as a start. And make sure your decision is based on logic and not pure emotion.
Then, all you can do is make whatever decision you think is best.
Have a Happy New Year and Good Luck to Everyone in 2017!