London property prices will rise by 2019, report claims
London property prices will rise by 2019, according to one of the country’s largest real estate agents.
Countrywide predicts house prices will rise by just 1.5 percent this year, which is a fall in terms of being lower than inflation, but will rise above 2017 figures by 2019.
By the end of 2018, prices will rise by two percent by the end of 2018 and three percent by the end of 2019, the real estate agent claims.
Rises will be bolstered by a lack of supply, says the report. Buyers are either opting to hold onto their existing homes, or continue renting, as affordability is stretched due to price and rent rises outstripping wage growth. Stamp duty rises have also caused buy-to-let purchases to drop.
Over the next two years economic conditions will challenge Britons, with inflation affecting budgets and interest rates tipped to rise. British consumers are feeling the pressure of a lower pound, which dropped after Brexit. This has pushed up the prices of food and clothing, which are increasing in price faster than wages are growing. Private consumption is growing at the slowest rate in almost three years as homeowners tighten their belts.
However, the UK economy is expected to recover and wage growth recommence as global growth picks up.
The biggest threat to recovery, according to the report, will be Brexit. The housing market will be affected by the outcome of Brexit negotiations, particularly the impact on employment, which will further dictate whether Brits will be able to afford to move.
The latest figures
- Prices are up in London: compared to this time last year, prices are up by 1.6 percent in London. The average asking price in the inner city (zones one and two) is £795,000, while the overall city average is £518,000.
- Prices are up throughout England and Wales: the average asking price rose by 3.1 percent over the last year to £314,000.
- Housing turnover in London has fallen: across the city, turnover has fallen by 17 percent since 2015.
- Luxury London property is falling in price: the capital’s most expensive areas are experiencing downward pressure. Seven districts of London recorded falling valuations, with the City of London experiencing the greatest drop at 5.7 percent year on year.
Investors look out of London for more options
The appetite for property outside London is growing, according to bank data. Lending is up in cities where investors are seeing potential for lower priced property with excellent returns.
The property market outside London has weathered the Brexit storm slightly better than the capital, as house prices continue to rise. Birmingham saw the greatest result, with an 8 percent rise in the year to July, with the average house costing £155,000. Manchester, Nottingham, Leeds and Liverpool property are also experiencing annual growth rates over 5 percent.