Forecast: How will the UK's property market fare in 2017?

 
Forecast: How will the UK's property market fare in 2017? [Photo: apomares via iStock]

If there was to be one word used to describe the UK's property market in 2016, then there can surely be little doubt that that word would be 'challenging'. Against a backdrop of political uncertainty, Brexit and hurdles for the economy to overcome, the property market in the UK has been faced with challenge after challenge. 

However, while there have been many challenges for the sector to overcome, it's actually no bad thing. When the market was called upon to perform in 2016, it did exactly that time and again. Even as the sector was hit hard by a range of hurdles, it has remained strong, and has grown, against the odds, showing just how positive it is, and how much potential it has for the future. 

So as we leave 2016 and head into a new year, and one which surely cannot be as unpredictable as the one before it, what will 2017 hold for the property market? Here, we take a look at a few predictions and forecasts.  

Property prices

Property prices are expected to continue to rise impressively in 2017. Sure, we aren't going to be returning to double-digit growth we've seen in recent years any time soon, especially with the Brexit cloud still looming, but the market will still be headed in the right direction regardless. 

Companies like Halifax, Knight Frank and the NAEA have all predicted growth of between one and four per cent in the coming 12 months, with most predictions showing a rise of about three per cent on average, thanks to the market being pushed upwards by low supply and high demand from buyers who are returning to the market after 2016's up and down year. 

Rental market

The rental market is also likely to see growth in a number of key areas in the year ahead, with many predicting that we will see the sector increase by around five per cent over the next year. Demand is likely to continue to climb throughout the year as 'generation rent' continues to look for high-quality places to live that fit into their lifestyles. 

We could also see a couple of things changing in the year ahead as well, however. The student market, which has been making the move from niche to mainstream in the last few years thanks to steady investment and a growing student population is likely to continue this move in 2017, while we are also going to see a rise in purpose built rental homes across the market, as tenants increasingly demand quality properties that have their needs in mind from the very inception of their design. 

Building

Towards the end of 2016, we saw a rise in houses being started, with the government reporting that in the 12 months to the end of September, there were more starts than at any time since the financial crisis. However, while this suggests the start of a growth period, backed by the government's intentions to build more, not everyone agrees this will be the case. 

It remains to be seen just what will happen, and indeed how the build to rent sector finds its feet will play into this, but while there are those who are predicting further rises in house building across the coming 12 months, some are also saying that numbers of starts could fall as low as 134,000 in the next year.