Lenders have upped their forecasts for property transactions for the rest of this year and next – but by very little. Trade body UK Finance initially
Lenders have upped their forecasts for property transactions for the rest of this year and next – but by very little.
Trade body UK Finance initially predicted 1.17bn sales for 2017 but has now upped this to 1.21bn.
It has also increased its 2018 predictions of property transactions from 1.15bn to 1.22bn.
The figures remain behind the 1.5m transactions a year averaged in the decade before the 2008 crash.
UK Finance said first-time buyer numbers have performed better than expected over the course of 2017.
Home mover activity has also performed a little better than expected, but UK Finance says it is still only likely to match levels over the past three years.
Record low mortgage rates have also helped those remortgaging, but landlords are being hit by tightened affordability criteria and tax relief changes.
Mohammad Jamei, senior economist at UK Finance, said: “We are slightly more optimistic about the next two years than we were a year ago.
“We expect more first-time buyers over the next two years, helped in part by competitive mortgage rates and government housing schemes.
“Home movers numbers have recovered a little in 2017, but look set to remain flat over 2018 and 2019, as they have benefited less from government support and have been largely left to fend for themselves. The number of home owners remortgaging with a new lender has grown strongly in 2017, and our expectation is for this to continue over the medium term.
“Regulatory and tax changes are among several factors that are reducing confidence in the buy-to-let market. This has led to subdued house purchase activity by landlords since the middle of 2016 and we expect more of the same over the next two years.
“Housing market activity on the whole has recovered somewhat over the last 12 months helped by first-time buyers, but this recovery only brings activity levels back to where they have been since 2014.
“Looking ahead, we expect activity to continue flat over the next two years, in part as a result of economic uncertainty.”