What will 2018 bring for the housing market?
As a new year begins, letting agents and landlords will be looking forward and anticipating how the private rental sector, and the housing market as a whole, could evolve in 2018.
From regulatory changes to price fluctuations, here are three of the trends that could prove particularly significant during the next 12 months.
Stricter government measures for landlords and agents
Letting agents and landlords alike need to be prepared for stricter regulations and legislative changes that could have an impact on how they do business in 2018.
On December 28th 2017, the UK government announced a series of new measures to clamp down on bad practices and rogue landlords. One of the new rules states that landlords renting properties in England occupied by five or more people, from two or more separate households, must have a licence.
In Scotland, meanwhile, a new letting agent code of practice will begin accepting applications this month. Letting agents have been given until the end of September 2018 to sign up to the scheme.
Brian Moran, lettings director of Your Move Scotland, said: "Landlords need to be aware that some key legislation changes are on the horizon and they should be making sure that their letting agency will be compliant with the new rules."
Ongoing growth in build-to-rent
One of the most significant housing market trends of 2017 was the growth of build-to-rent - the construction of large property developments specifically for the rental market. This is likely to continue over the coming 12 months.
In September 2017, the British Property Federation (BPF) released figures showing that there were nearly 96,000 build-to-rent homes complete, under construction or in the planning stage across the UK. That number marked an increase of 37 per cent from 69,824 in the first quarter of last year.
The sector has attracted lots of interest from investors looking to make the most of the opportunities available in the private rental market. With an increasing number of would-be buyers struggling to get on the property ladder, long-term renting is becoming more common, making build-to-rent developments a more viable option.
Ian Fletcher, director of real estate policy at the BPF, said build-to-rent has "much to offer" when it comes to addressing the "supply-demand imbalance" in the UK housing market.
Modest price growth
Looking across the UK housing market as a whole, forecasts suggest that prices will continue to increase in 2018, but the rate of growth will be slower than that witnessed in recent years.
In its latest monthly report, Nationwide said house price growth remained in the two to four per cent range throughout 2017, but will be "broadly flat" in the coming year, with a slight gain of one per cent.
Robert Gardner, the building society's chief economist, said: "We continue to expect the UK economy to grow at modest pace, with annual growth of one per cent to 1.5 per cent in 2018 and 2019. Subdued economic activity and the ongoing squeeze on household budgets is likely to exert a modest drag on housing market activity and house price growth."
Despite the possibility of slow growth, average prices will remain prohibitively high in certain parts of the country, meaning letting agents and landlords will continue to see strong demand for private rental properties.