House prices forecast to GROW across UK in 2018 – what is a ‘two-tier’ market? | Property | Life & Style

The forecast indicates price growth in the lower and middle sectors of the market is set to continue in 2018, with Rightmove forecasting an average growth of 3% for typical first-time-buyer homes and 2% for second-stepper properties. 

But that top of the ladder properties, for example four and five bedroom homes in more affluent areas such as London and the commuter belt, are predicted to fall in the next 12 months by an average of 2%.

If correct, this forecast would see house prices grow by 1% on average in 2018, which although still in positive territory, would be the slowest rate of growth we’ve seen since 2011, and would represent a slightly slower pace of price rises than the 1.2% recorded this year

In terms of the current month, 2017 finishes up with an annual rate of +1.2%, with December seeing a seasonal price fall of 2.6% in the price of property coming to market. 

The average fall at this typically quieter time of year has been 2.1% over the last seven years, and this slightly greater dip is in fact the largest monthly fall for five years.  It is perhaps symptomatic of the more challenging market some sellers find themselves in and it is also a factor in Rightmove’s slightly more cautious prediction for 2018 compared to this year.

But what are the reasons for a ‘two tier’ housing market?  And why the subdued growth predictions for next year? 

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House prices UK: There has been a property boom predicted for 2018


Home owners have had a good run, with every year since 2011 seeing a rise in the price of property


The answer is a complex one.

On one hand lies the ongoing shortage of suitable properties for sale in some locations where there is strong demand, which will result in upwards price pressure in new seller asking prices in those areas.  

The crucial factors at play as we go into 2018 are that overall housing supply remains historically tight, as recently reported by the Royal Institution of Chartered Surveyors, together with restrained expansion of house-building. 

This has led to estate agents seeing reduced amounts of properties for sale in many parts of the country, especially further North where demand continues to exceed supply.

All of this is underpinned by historically cheap mortgage rates, which are still at record lows despite the recent interest rate rise. 

On the other hand, however, there are equal factors which are likely to keep another…

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