(Bloomberg) -- U.K. housing experts predict the nation is in for a year of stagnating prices in 2018.
Overall growth will come to a halt as the number of transactions falls slightly, the Royal Institution of Chartered Surveyors said in a report Wednesday, with a continued dearth of supply preventing outright declines. Some regions are set to see gains, offsetting slumps in London and the southeast. Political and economic uncertainty, tax changes, a lack of stock, stretched affordability and the Bank of England's rate hike in November are all influencing factors, according to the report.
“With several forces currently weighing on activity set to persist over the near term, it's difficult to envisage a material step-up in impetus during the next 12 months,” said Tarrant Parsons, RICS economist. “Price growth may fade to produce a virtually flat outturn for 2018.”
A separate report from the Nationwide Building Society Wednesday forecast that house prices will remain broadly flat next year as subdued economic activity and the ongoing squeeze on household budgets exert a “modest drag” on market activity. A marginal gain of about 1 percent is possible due to lack of supply, it said.
“How the housing market performs in 2018 will be determined in large part by developments in the wider economy,” Nationwide Chief Economist Robert Gardner said. “Brexit developments will remain important, but hard to foresee.”
The reports add to evidence that the property market's tough time will continue. Real-estate website operator Rightmove said this month that home values in London are likely to fall 2 percent in 2018, and that they will cool to a gain of 1 percent nationally.
Changes in fresh demand and supply have “become virtually aligned,” the RICS report said, “curbing downward pressure on prices.”
Most parts of the U.K. will see prices edge higher, apart from East Anglia, the northeast and the southeast, RICS said. The strongest gains will likely come from Northern Ireland, Scotland, Wales and the northwest of England, according to the report.
--With assistance from Lucy Meakin
To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Andrew Atkinson
©2017 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
