There have been some interesting predictions forecast recently about the UK property market over the next 4-5 years. These changes suggest that affordability rather than the Budget or Brexit will impact the residential property market, driving rental prices up due to increased demand.
UK property prices are predicted to soar over the next 4 years, with the most significant turn of events being that properties north of the border are expected to see the largest increase in prices.
The high-end estate agent Savilles has recently published their predictions which see an overall rise in both house prices and also in rental value over the next 5 years. They forecast that on average UK house prices will raise 14.8% between now and 2023. This percentage growth varies throughout the country, with homes in the North West predicted to rise in value by up to 21.6%.
For the bulk of London properties this increase is said to be just 4.5% between 2019-2023. But for London’s prime market they should see a much larger increase in property value, with properties rising <12.4%, Savilles predicts.
The Help to Buy Scheme continuation was surely factored into the figures that Savilles published on the 2nd November 2018. The fact that there will be a lot more funding available for first time buyers from now until 2023 will impact the amount of first time buyers entering the property market, thus raising prices. Transactions are said to stabilize, which is good news overall for the UK economy as a whole.
Perhaps the most shocking part of their prediction is that the average rental price is set to increase by 13.7% throughout the UK. This increase is predicted to be a massive 15.9% increase in rental prices for London properties.
There seem to be a few complete u-turns that are predicted. Firstly that the Northern properties will increase significantly in value, stabilising prices and enhancing the property values in the Northern parts of the UK up to 21.6%. Also that the UK property market finally seems to have recovered from the 2008 financial crisis and properties in both the prime markets and also more remote areas are set to increase.
It is certain that people are concerned about the impact that Brexit will have on the housing market. However, Savilles state that it is the stability or increase of transactions that creates a strong property market. Since Brexit the volume of property transactions has fallen 6.9%, to put that in perspective, 1.145million homes change hands every year in the UK.
The buy to let investor market has seen a downturn of a massive 23%. This is sure to have an impact on the overall housing prices in the UK. The main reason for this is landlords looking for higher ROI investments. However, this should be stabilised by the recently announced “ Housing Infrastructure Fund” that will finance the building of some 650,000 additional council properties.
All in All the rental market is reportedly going to see a rise in rental prices of <13.7%. This is only set to rise more until the onset of new properties. The demand for rental properties is high, and the amount of people in the buy to let space is reducing. Therefore the rises in rental prices will affect us for a few more years yet.