MYSTIC CLIVE IS BACK WITH HIS PROPERTY PREDICTIONS FOR 2018

Clive Hedges | Residential Partner

Reflective types tend to look back and ponder the past 12 months at this time of year, but I am someone who prefers to look forward.  After a 2017 in which uncertainty has perhaps been the over-riding emotion, we enter 2018 with some reasons to be cheerful, provided our political lords and masters can agree on the correct course of action for the economy, tackling social issues, and above all, our future relationship with our European trading partners.

Some property industry figures are predicting doom and gloom for the next 12 months, but as I offer my customary ‘Mystic Clive’ predictions for the coming year, I am cautiously optimistic.

With the caveat that any forecasts are subject to being knocked off course by political shenanigans, here are my six top property tips for 2018.

1.  By the end of 2018, we will have to have clarity on Brexit, which is currently the elephant in the room which is overshadowing every aspect of the economy.  It might, of course, be a case of being certain that we are in for another few years of uncertainty, but realistically the negotiations will have to be concluded by the autumn so that the outcome can be ratified before March 2019; so even if it’s a worst case scenario, at least we will know.
2.  Interest rates will continue to rise, but only in small, baby steps.  I would be surprised if the base rate was above one per cent at the end of 2018.  Although for many people with mortgages this will be the highest rate they will ever have known, in historical terms it means that borrowing is still cheap – and I don’t see interest rates being a factor in slowing the market.
3.  Inflation will peak early in 2018, and then start to fall away.  At the moment the collapse in the value of sterling is still a factor, but this will work its way out of the figures, and we will see inflation subside back towards the two per cent target by the end of the year.
4.  The measures introduced in the Budget to help first-time buyers, coupled with existing initiatives such as Help To Buy, will galvanise the bottom end of the market (in fact we are already seeing this), and that in turn will have a positive effect right on up the chain as 2018 progresses.  The spring could be a very good time to be selling family-sized homes.
5.  The boom in staycations will continue, and we will see more landlords moving away from residential letting in favour of holiday lettings, especially bijou properties at the luxury end of the market.
6.  Despite measures to stimulate house building, the lack of supply will continue to put pressure on prices, and I predict that the average house price in Norfolk will rise by five per cent during next year – well ahead of inflation.

 2018 will again be a challenging year, but there is reason for cautious optimism provided we all keep our heads and act rationally.  Merry Christmas.