With the Brexit negotiations well underway and political unrest sweeping the nation, it’s no surprise that the housing market has been unsteady of late. House price growth has slowed in recent months, and with further uncertainty ahead, house buyers and homeowners alike are questioning what the housing market could bring in 2018. In this article we take a look at the potential options, and see what the experts think.

First things first, how is the housing market looking currently?

The growth in house prices unexpectedly rose over the past couple of months, perhaps due to employment growth and a shortage in the amount of properties on the market. Many estate agents have been struggling to bring on new properties, and have been appealing to local owners to sell their homes. Prior to this, house prices had slowed sharply, driven by Brexit uncertainty, stagnant wage growth and a decrease in the pace that mortgage rates are falling.

As Estate agent Jeremy Leaf warned, “the recent house price growth has been driven by a shortage of supply, including housebuilding, historically low mortgage rates and relatively low unemployment, rather than strong buyer demand.”

Mind the gap

On a national level, house prices rose 2.2% between June and September, making the average cost of a home £210,982. The anomaly in this findings is the London region, which was the only area in the UK where prices fell over this period. This makes the capital the weakest-performing region for the first time in 12 years.

Although London remains by far the most expensive place to buy a property in the UK, the gap between house price growth across different regions is closing. Annual growth rates in the south of England have slowed slightly, but prices across the midlands and the north west have been growing at a steady rate.

Mortgages and millennials

The number of mortgage approvals dropped to a nine-month low of around 65,000 in June, and property surveyors have reported a reduction in the number of new buyer enquiries. Estate agents James Pendleton noted, “annual growth rate has been broadly shrinking like a tyre with a slow puncture since the middle of last year”.

Perhaps a factor in the slow down of new buyer enquiries is due to millennials holding off buying their first properties. Many under 30s still rent, or live with their parents, due to high house prices and comparatively low wages.

So, what next?

Despite Brexit and political uncertainty, property values in all the British regions are likely to rise over the next year or so. Countrywide has predicted that house prices will rise by a further 1.5% this year, and another 2% in 2018. This is a much slower growth than seen in previous years, but the lack of supply could continue to support house prices.

As buyers are choosing the stay in their current home, house supply remains low. What’s more, changes in stamp duty have also led to a drop in the number of buy-to-let purchases. The rate of new housebuilding is also not expected to grow enough over the next two years to catch up with the previous shortfalls.

Brexit may be key

The outcome of the ongoing Brexit negotiations is likely to prove key to the direction of the housing market, and the broader economy. The current uncertainty is proving a risk to the market, as homeowners are putting off moves until they are sure about the economy’s future. Once the future is clearer, many homeowners or potential buyers may feel more confident in making a move.

Matthew Poole, Senior Mortgage Consultant at Eddison Wells, had these words for any potential buyers and homeowners: “I’d imagine we’ll see a similar trend that we have in 2017. With a lack of supply I’d suggest that prices are unlikely to drop as there could be a lot of competition between buyers for available properties."

So, if you’re looking to move in the near future, our advice is to approach with caution. Do your research, be confident in your budget and what you can afford and also, speak to an expert. Taking the advice of a mortgage consultant can help you assess all of your options, and make an educated decision.

Eddison Wells is a mortgage brokerage - with a wealth of knowledge, their team are able to advise on a comprehensive range of financial products. Providing the highest quality service at the most affordable price is a prerequisite and a firm ethos. If you’re thinking of taking your first mortgage, call Brighton-based mortgage brokers Eddison Wells on 0800 808 9981 - a member of their team will be willing to help, and provide advice based on your own circumstance.