If the UK achieves an orderly Brexit – house prices are predicted to rise by an average of 15.3% over the next 5 years – and quite possibly beyond that. That’s at least according to The latest 5 year price forecast for the housing market by Savills.
The agent has forecasted an increase of 0.5% this year, 1% in 2020, 4.5% in 2021 – then 3% up each year until 2024.
Savills have based these forecasts on the assumption that 1) the general election does not result in any major shifts in policy environment 2) that Brexit negotiations go smoothly and 3) that we avoid recession, – But if things do go as the polls suggest they will – Savills estimates that the average house price will reach £266,000 by 2024.
The strongest price growth is expected to be witnessed in the North West of England (24% between 2020 and 2024), due to “the strength and diversity of the regional economy and the capacity for higher loan to income borrowing”. But it’s a trend that’s expected to occur throughout the UK – with growth rates predicted across the country.
London and the South East are expected to significantly underperform however in relation to the rest of the UK, with property price increases forcast at 11% across the South East and only 4% across greater London.
The London property market also is inevitably more dependant on the outcomes of Brexit negotiations than any other area- and this is especially applicable to the most sought after parts of central London. And whilst it’s true to say that the most fashionable London postcodes are unlikely to ever decrease significantly in price, the speed of recovery in these types of locations will depend far more on political outcomes than anywhere else.
Despite this – price growth is still predicted, just less so than other areas. And it’s worth bearing in mind also that this is due in part to these regions having outperformed the others previously. So for anyone who has been contemplating buying a property but has been deterred by the potential house price crash – it looks as though you might be able to afford to act with more confidence.
Of course, there are many who will say that financial predictions such as these are impossible to make – especially in such a volatile environment. One such person is Buying agent and media commentator Henry Pryor, who hit back at Savills predictions with this tweet…
“It takes balls the size of space hoppers to make a five-year price prediction, what with Brexit, an election and a budget to follow”.
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