RICS expects house price growth to grind to a halt in 2018
- Credit: Archant
House price growth in the UK is likely to slow to a halt through 2018 as the number of transactions reduces, according to a housing forecast by RICS.
However the industry body said declining prices in London and the South East could be offset by price rises in other parts of the country.
It follows underwhelming activity in the residential sector in 2017, with buyer enquiries and sales volumes stalling and sentiment turning more cautious as a result.
RICS expects the overriding issue of near-record low stocks on estate agents books to continue impacting behaviour in the housing market in 2018, with no signs that the year will see a turnaround in supply in the second hand market.
Political and economic uncertainty, combined with the lack of stock, stretched affordability, tax changes and interest rate rises, are expected to keep the market below 1.2 million sales in the year.
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RICS said there could be some activity stemming from changes in stamp duty (SDLT) announced in the Autumn Budget, which will see it abolished on all homes under £300,000 for first time buyers, but added that higher prices could negate the tax saving.
Tarrant Parsons, RICS economist, said: 'Following a pretty lacklustre finish to 2017, the indications are that momentum across the housing market will be lacking as 2018 gets underway.
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'With several of the forces currently weighing on activity set to persist over the near term, it's difficult to envisage a material step-up in impetus during the next 12 months.
'However, the fundamentals are not much changed from the end of 2017, so levels of activity should soften only marginally when compared to the year just ending.
'A real lack of stock coming onto the market remains one of the biggest challenges, while affordability constraints are increasingly curbing demand in some parts. Given these dynamics, price growth may fade to produce a virtually flat outturn for 2018.'