UK property prices set to rise after 1pc growth in 2017
Prices of UK real estate have been falling since the summer of 2014, and this year will see growth of just 1%, says a new report.
In central London, where the slowdown has been most noticeable, London property prices are expected to fall slightly in 2017. However, in coming years prices will rise, with an average rise of 14% by 2022, according to a report by Knight Frank.
The international property company crunched a few numbers and are predicting the following:
- Across the UK: property prices will rise by 2.5% next year, by 3% in 2019, 3% in 2020 and 4% in 2021.
- In London: after a 1% dip this year, prices of property in London will rise by 2% next year, by 2.5% in 2019, 3% in 2020 and 5.5% in 2021.
- Rents are also predicted to grow, rising by 1.4% this year, by 2% in 2018, 2019, 2020 and 2021 - a total of 9.8%.
The report also points to a number of risk factors that could affect the UK property market, including an economic slowdown, and Brexit uncertainty.
“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,” the report said.
Another factor behind the recent slowdown is the lack of homes in the UK available to buy. This pressure could be eased by a slew of newbuild developments planned across the country in the coming years. The report shows that the number of new homes that have been built recently has risen, but there is still some way to go to reach the number to meet the current demand.
“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.
The Knight Frank report also points out the sizeable difference between the property market in London and the rest of the UK.
Prices dip in April
As well as property prices falling last month, the number of property sales across the UK fell significantly in April, with 22% fewer transactions, and fewer people took out mortgages.
Mortgage sales dropped by 16% between March and April, a report shows. The number of landlords taking out mortgages last month was especially low, with a 20% drop on last year. This reflects government measures taken to slow the buy-to-let market, including cuts to mortgage interest tax relief.