British property market health to depend on the economy in 2017

British property market health to depend on the economy in 2017 [Photo: nikauforest via iStock]

The British property market's growth and general health moving forward will depend on how well the country's economy performs as a whole over the course of the coming 12 months, according to new predictions. 

The biggest challenge that awaits the nation as we approach 2017 is that of the upcoming Brexit negotiations. And as the UK readies itself to trigger Article 50 and start formal proceedings for leaving the European Union (EU), it will largely depend on the outcome of such talks as to how well the market will perform moving forward. 

Nationwide said that the general outlook for the market at the moment is for growth, even if it will be somewhat subdued depending on how the economy performs. It said that even if the economy isn't looking great, however, the market should generally be in a good place, and predicted modest price growth for the year as a whole that should float around the two per cent mark. 

This is likely even at a time when most of the major economists in the UK are predicting that the Brexit process will cause the UK economy to stumble slightly. As long as it doesn't fall too much, property should have the strength to stand on its own two feet at a time when uncertainty reigns, and it does look like any fall should be somewhat modest in terms of the economy. 

"Like most forecasters, including the Bank of England, we expect the UK economy to slow modestly next year, which is likely to result in less robust labour market conditions and modestly slower house price growth," said Nationwide's chief economist Robert Gardner.

"But we continue to think a small gain of around two per cent is more likely than a decline over 2017 as a whole, since low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices," he added.

Strong points for the market in the year ahead are likely to include the building sector, with the Nationwide prediction stating that the majority of building firms are looking to increase output in the year ahead, which can only be a positive for the market as a whole moving forward. In fact, Nationwide is predicting that the property market should experience growth in terms of building levels for each of the next five years. 

It's also expected that the rental market should perform well across the course of the next year. Although there may be issues with supply as the rental market sees new costs being thrust upon it by the government, the Association of Residential Letting Agents has said that it expects to see demand rise in the coming 12 months, with more than half of its surveyed members believing that this will be the case, helping to provide a boost to the sector in the year ahead.