Home prices for the UK are expected to increase by 18% over the next five years in an analysis by Strutt & Parker and PropertyWire. Prime property values continue to be stagnant in London with expectations that growth will return in 2019 by 4% and perhaps 6% by 2021 and 2022.
A worst case scenario predicts prices to drop 5% for 2018 and become flat by 2019 followed by a price increase of 1% in 2020 thus eliminating any chances for growth for the next five years.
The lettings market sector for prime London property is expected to rise 1.5% in 2018 and 2% growth is forecast for 2020 and 2% for 2021 and 2022.
Strutt & Parker report that the local residential market for Britain and Wales is expected to remain steady with results being equal to last years transactions. London central prime is still expected to remain below last years results.
As for the UK and London prime property transactions Vanessa Hale director of research at Strutt & Parker says:
‘Whilst Brexit negotiations continue and political and economic conditions remain uncertain, we have held our residential house price forecasts for sales.’
‘We maintain that from 2019 onwards it is extremely difficult to forecast the housing market
with any certainly, but we would expect some bounce back and a return to growth once more
stability has returned to UK politics and the economy.’
Guy Robinson of Strutt & Parker also commented on the residential market:
‘In a climate of fast property price growth and low stamp duty, the cost of moving previously seemed relatively inconsequential, but now, with higher stamp duty and lower house price growth, moving costs are extremely material in the whole event, and has had an impact.’
’People have come to terms with Brexit, and sellers should be preparing to act on plans put back from last year. As we move into summer, we are hopeful that a lift in confidence will see an increase in supply to meet current buyer demand.’
It is reported that transaction levels for England and Wales look to be on track with last years results with Strutt & Parker’s head of London residential agency Charles Willis commenting:
‘Whilst some buyers may have been driven to look at investments in other sectors and abroad
over the last few years, the impact of stamp duty and taxation as a whole on prime central
London sales appears to have been absorbed by a reduction in asking prices.’
‘While fewer properties are transacting than before, there has been a recent increase in
competitive and sealed bids; and early signs that transaction levels and buyer confidence are
rising. Buyers realise there will be more competition in the market the closer we get to a
resolution on Brexit, and that they should make the most of fixed lending levels now, with further interest rate increases likely.’
New rental tenancy is reported for prime central London decreased by 11% for the 1Q of 2018 when compared to the same time in 2017.
Kate Eales, head of residential lettings at Strutt & Parker, on the supply of turnkey lettings property:
‘Investors who turned to lettings 12 months ago are returning to the sales market, they have come to terms with more realistic pricing and are focused on a sale.’
‘The reason this is not driving pricing up is because this is only one segment of the market, the older, tired rental stock will continue to sit on the market with longer voids and potentially lower rents. The tenants that are out there in the market are more discerning than ever and want the best on offer.’