The country’s house prices have certainly surprised many in the industry over the past couple of years. While major negative events can often have a knock-on, detrimental effect on investment appetite, the UK’s housing market has remained remarkably buoyant.
In fact, the pandemic has sparked arguably even more interest and activity in UK property, spurred on by the government’s 26-month stamp duty holiday, which came to an end in September last year.
But can the momentum continue, or is a house price fall on the horizon? Some of the most trusted forecasters in the industry have their say.
Savills: House prices will climb slowly for next five years
The estate agent’s most recent five-year forecast predicts a slowdown in the rate of house price growth over the next half a decade, with a total rise of 13.1% across mainstream residential property. But at least for this next year, it believes we can expect house prices to increase by 3.5% across the UK.
This will slow to 3% for 2023, 2.5% for 2024, 2% for 2025 and 1.5% for 2026; but, of course, this is subject to what we know now, and as has been made clear by the Covid pandemic, nothing is certain in this market.
The north-west and Yorkshire & the Humber will be the standout performers, according to Savills. They could each achieve house price rises of 18.8% by 2026.
JLL: Fast-paced growth led by north-west and Midlands
The real estate service company’s five-year residential outlook is slightly more bold. It expects the current accelerated growth we’ve seen to continue for the next two years, before slowing in 2024.
In figures, JLL pins 2022 and 2023 as having house price growth of 4.5%. Property owners can expect a more modest uptick of 3% in 2024, before resuming a faster rate of growth of 3.5% in 2025 and 4.5% in 2026.
The report pinpoints particular areas that could see much bigger price hikes. In the Midlands, Birmingham can expect average house price growth of 4.9% per year on average between now and 2026. Meanwhile, in the north-west, Manchester leads the way with a predicted 4.7% average increase per year for the next five years.
Zoopla: Slower price rises as appetite wanes
Property portal Zoopla offers a short-term outlook for the UK housing market, based on normal average activity combined with current circumstances affecting the sector.
It expects property prices to swell by 3% by the end of 2022, which is in line with Savills’ prediction. This is due to an anticipated fall in transaction levels after this year’s “frenzy”, prompted in part by the rise in the cost of living as well as higher mortgage costs which could come off the back of interest rate rises.
On a regional basis, like the others, Zoopla sees the most significant value growth in the north-west. Here, house prices could creep up by 4% over the course of this year, it says, matched by the East Midlands.
At the other end of the scale, London’s property values could rise by just 2% in the year ahead, says the property portal. The capital city has fallen behind fairly significantly in terms of house price growth in recent years, and it seems most in the industry expect this fallback to continue, at least in the near future.
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