In a year when we started to see the real effects of Brexit rather than the theoretical and imagined consequences, we also saw the British government enact one of the worst gambles in contemporary British history, losing their majority in the summer.
In contrast, property had another successful year, even though the government had already enacted legislation increasing taxes on landlords and announced the abolishment of tenant fees.
House price growth
What can expect from house prices in 2018? House price growth in 2017 was modestly impressive, with increases of roughly 2% over the course of the year reported by Rightmove.
It is predicted that house prices will grow by up to 3% next year, with particular success in homes typically bought by first time buyers.
In addition to growth in the capital value of homes, rental growth is also expected to grow over the next 12 months as supply and demand largely remains the same.
Inflation this month, announced by the Office for National Statistics, has been reported at 3.1% which is the highest rate for some time. The cost of living appears to be raising quickly, thought to be mainly contributed to by Brexit, but are wages able to keep pace?
It doesn’t look good, with the Chancellor announcing in his budget that it will not be until 2021 that we see a return to the wage growth of the years before the 2008 financial crisis, marking a 13 year stagnation.
With this in mind, it is unlikely that the number of young buyers is going to increase significantly without extra support, and so landlords investing in either residential or off-plan can remain confident that the demand for rented properties will remain high and so too the pressure on rent rises.
With Philip Hammond announcing the abolition of stamp duty for first time buyers, it is likely that the government will plough significant resources into the first time buyer market. Politically, the Tories can ill-afford to take young voters for granted anymore and many expect to see this made a priority.
House building and government incentive schemes will be plentiful and this could well kick-start further building. Off-plan property is still booming, and the increase in activity will likely see high demand from renters.
Landlords investing in the UK should expect high demand this year with solid yields and good rental growth.