It has been predicted by one of the
UK’s largest mortgage lenders that house prices are likely to continue
increasing in 2017 but at a much slower rate than 2016 – by just 1% in some
cases. House prices peaked at a 10% increase in March 2016.
It is claimed that the decrease in
house price growth will stem from continued uncertainty with the UK economy
following Brexit back in June 2016. Halifax said it is 'most likely' that the
economy will soften over 2017 and lower levels of house sales will occur as
more people respond to weaker economic conditions and a deterioration in
housing affordability by not buying or moving home.
However, the silver lining to this
cloud is that it is predicted that a shortage of properties for sale and low
interest rates ensuring mortgages remain cheap will help to keep supporting
house prices in general.
There is also continued speculation that
slow economic growth in 2017 due to weakening of the pound impacting on import
costs could result in pressure on employment and therefore a higher risk of a
rise in unemployment.
Martin Ellis, housing economist for
Halifax said: 'This deterioration in the labour market, together with an expected
squeeze on households' spending power - as inflation picks up and outpaces
earnings growth later in the year - is likely to curb housing demand.'
Halifax's prediction runs parallel with
several other forecasts, which point to UK house prices continuing to rise in
2017, but at a slower rate than that seen in 2016.
The Royal Institution of Chartered
Surveyors said it believes property values to push up by around 3 per cent over
2017, while Nationwide Building Society predicts house price growth of around 2
per cent over next year.
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