2017 is shaping up to be an excellent year to buy property, if predictions are proved correct.
The revered Halifax UK Housing Market Outlook report is placing its bets on a slow-down of property prices, leaving a buyer’s market for the willing and able.
Predictions, however, are often a little difficult to get right as history has already shown. In 2016, with interest rates looking to increase and an overcooked market, most buyers were eyeing a slower residential property market, but were taken by surprise with a 6% increase in prices instead.
Recent online surveys of homebuyers have turned up interesting results. In 2015, homebuyers were asked what they thought the market would be doing by the end of 2016. Almost 70% predicted prices would rise, while almost 20% guessed that prices wouldn’t change at all. Only 6% of the people that did predict a rise called the figures correctly.
The question is obvious: how did we get it so wrong? The answer lies in the idea that good things can’t last forever. The market has been steadily increasing over the last few years, and buyers are cautious that the growth couldn’t last. This caution is causing the depressed outlook in predictions, despite figures reporting the opposite.
The historically low interest rates that we are seeing are leading to skewed results from recent and prospective home buyers. The Bank of England cut rates to 0.25% back in August, which took a massive 97% of responders by surprise in the survey conducted by British Buyer Barometer.
The combined factors of the historically low interest rates along with slow construction figures and a shortage of homes for sale is bound to provide some buoyancy for house prices.