Another new year is nearly upon us and, once we’ve got the season of mince pies, mulled wine, pigs in blankets, turkey and over-indulgence on chocolates, booze and sweets out of the way, 2018 will swing into gear.
What, though, are the things to look out for? Using my magical Mystic Meg crystal ball – and a dollop of common sense – I’ve taken a quick look.
A stalling Brexit
If the negotiations so far are anything to go by – we’ve just completed phase 1 as I write – the process of withdrawing from the EU will continue to be long, complicated, arduous and frustrating. The endless uncertainty, speculation and toing and froing helps no-one, but decoupling from a decades-long union was never going to be easy
When it comes to property, talk of house prices falling off a cliff or an apocalyptic property crash have died down as the industry has got to grips with the new normal. Yes, the uncertainty isn’t ideal, but if you’ve got a robust, resilient workforce and a ‘keep calm and carry on’ mentality, anything is possible.
The growth of AI
While 2018 is highly unlikely to be the year where AI starts playing an integral role in the property market, firms have been warned that they need to embrace revolutionary technology or risk becoming obsolete.
The recent Budget also showed how seriously the government is taking AI, with £75 million set aside to support start-ups, increase the number of PHD students working in this field to 200 per year and help create an AI advisory board which will look at ways of breaking down the barriers to AI development. Currently, Britain is lagging well behind world leaders in AI such as China, Korea, Taiwan and Japan (who are responsible for 70% of all AI technological development), but the government is determined to stop us from being left behind by the competition in the tech revolution.
One form of AI is machine learning, which is essentially what ValPal's algorithm does - learning from previous data and using it to create new data.
I know, I know, not very exciting, but hugely important. As I noted in my previous piece, GDPR is the biggie – remember, our own GDPR Holly has all the answers to this tricky, complex subject – but there is also the introduction of MEES, the possible introduction of the lettings fees ban in England, and a truckload of consultations on changes to the private rented sector, including the prospect of longer tenancies as standard.
To float or not to float
Will we see OnTheMarket float on the Alternative Investment Market in 2018 (no date is currently set), or will the saga rumble on? As always, this subject should make for some interesting news pieces in the upcoming year!
Firms to keep an eye on
Rent4Sure, the tenant referencing specialists who I’ve mentioned a few times before, are set for a big 2018. They already count themselves as one of the leading suppliers to the UK lettings industry, providing references, credit and Right to Rent checks, rent protection and insurance products (tenants, legal and landlords) to thousands of customers across the country. The company – which has more than 100 staff across three offices in Reigate, Dover and Norwich - is definitely one to keep an eye on, with considerable growth since they were founded in 2009 and more expected to come in the next few years.
Box Brownie is another – a firm which specialises in high-quality photo editing, 3D renders and floor plans at ‘unbeatable prices’. It offers a cloud based, no subscriptions, unlimited changes system, with heavy emphasis on fast turnaround times (24 hours or 48 hours for virtual furniture).
Based on Australia’s Sunshine Coast, BoxBrownie.com has a large team of experts around the world providing services to everyone from estate agents to property developers. Founded by Aussies Mel Myers and Brad Filliponi, the company also offers copywriting services and has collaborated with the likes of Savills, REMAX, Century 21 and Sotheby’s.
A good year for landlords?
Online letting agent Upad believes 2018 will be a good year for those letting properties in the private rented sector, with the changes to the buy-to-let sector helping rather than hindering landlords and investors. The agency believes that tenancies changing to a standardised 12 months rather than six months – if that were to happen - would help landlords to avoid frequent void periods and the pain these can cause, while the proposed reforms to Universal Credit will allow more landlords to let to tenants receiving this benefit.
What’s more, Upad says that changes to tenant referencing will enable landlords to let homes to reliable rent payers regardless of their overall financial situation. And instalment-based tenancy deposit schemes – a new alternative to one lump sum ones – will allow landlords to appeal to tenants who can’t afford to pay significant lump sum deposits upfront.
One thing’s for sure – the PRS is set to grow again in 2018 and any talk of the death of buy-to-let has proved fanciful despite the numerous attempts to dampen this market.
Fundamentals remaining sound
According to high-end agent Winkworth, the recent housing announcements in the Budget should have a positive impact on activity in the first few months of next year, with first-time buyers boosted at the lower end of the market thanks to the stamp duty cut. This, in turn, should lead to higher transaction volumes further up the ladder, as second, third and fourth steppers look to trade up and elderly homeowners look to downsize.
The government’s promise to build many more homes – reaching 300,000 a year by the mid-2020s – should also help to keep demand high, especially among first-time buyers. Overall, Winkworth expects prices to fall in London by 3% as affordability issues and Brexit uncertainty bite, but it also predicts that Prime Central London (PCL) will fare better after its recent struggles.
As for the country as a whole, the outlook is more positive – with an upturn in housing activity in the latter stages of this year expected to continue into next year. Prices are also expected to rise across the country next year as supply continues to lag behind ever-increasing demand.
So there we have it. I’ll either be receiving admiring glances for my mystic powers or have egg on my face in 12 months!
Before I go, quick shout out to the Agents Giving Charity Ball, which took place last night at the 5-star Royal Lancaster London hotel near Hyde Park. The fourth annual event, sponsored by Goodlord, included the brilliant Strictly Agents Dancing – with twelve of the industry’s bravest dancers and their professional partners going toe-to-toe to try and win the Agents Giving Glitter Ball Trophy.
This year’s dancers included Simon Bradbury (for the second year running), Peter Fenwick (sales manager at ValPal-sponsored Reapit) and estate agent consultant and former lettings supremo Jane Gardner.
That’s that from me. Until next time…
*Nat Daniels is the Chief Executive Officer of Angels Media, publishers of Estate Agent Today and Letting Agent Today