UK property prices set to grow by just 1% in 2017, then recover again
UK house price growth has been slowing since the summer of 2014 and is likely to see growth of just 1% in 2017, according to a new analysis report.
But in central London, where the slowdown has been more pronounced, prices are predicted to fall slightly this year, however, looking ahead prices could see a cumulative rise of 14.2% by 2022, according to the analysis market report from international real estate firm Knight Frank.
The forecast suggests that prices will rise UK wide by 2.5% in 2018, by 3% in 2019 and 2020, by 4% in 2021. After falling 1% this year, prices in London are projected to rise by 2% next year, by 2.5% in 2019, by 3% in 2020 and by 5.5% in 2021.
Rents are predicted to continue with steady growth, rising by 1.4% this year, by 2% in 2018, 2019, 2020 and 2021, to a cumulative 9.8%.
The report points out that there remain key risks to UK property market performance, not least a slowdown in economic growth, and uncertainty surrounding the Brexit process.
It suggests that several factors are behind the recent slowdown in market activity, not least a lack of available homes to purchase and this has increased focus on the delivery of new- build homes across the country.
The report explains that data from the Department of Communities and Local Government (DCLG) shows that the number of new homes being built in recent years has risen, but it still remains some way below the number needed to meet current demand, not to mention the large historical shortfall.
‘The shortage of housing stock available to buy coupled with ultra-low mortgage rates have put a floor under pricing across the UK, but the question of affordability is becoming more pressing in some areas, especially as lenders still expect sizeable deposits from buyers,’ the report says.
It also points out that there are also notable variations between prime housing markets in London and the country.
‘As the UK moves closer to Brexit, any economic uncertainty could have a knock-on impact on the housing market, especially if wage growth and employment levels across the country are affected,’ it concludes.