A new report has revealed that property price growth for 2017 is likely to be most prominent in regions outside of London.
Data from an investigation by real estate advisors JLL suggests there will be overall residential price growth of 0.5% in the UK during the year. This is set to increase to 1% in the capital, but the prime market here is set to be flat.
The forecast for house price is so low due to economic and political uncertainty. Apprehension over Brexit could have knock-on effects to other area, the report suggests.
However, it states that cities such as Manchester, Edinburgh and Birmingham could well perform best. Manchester city centre has seen poor levels of supply during the last few years, which in turn has pushed up prices by nearly 15% and rents by 11% in 2016. There is due to be little change in these growth percentages during 2017.
In Edinburgh, there is strong demand for suburban family homes. In addition, Build to Rent is taking shape in the city centre.
Property price growth set to be subdued in 2017
Andrew Frost, leader director of UK residential at JLL, noted: ‘Legislative changes, such as stamp duty and the uncertainty around Brexit have led to weaker investment demand from overseas as well as domestic buyers. Alongside an overstretched owner occupier market, this will keep a lid on price pressure.’
‘At the same time, build costs will see significant inflation as the devalued pound sterling hits imports while the Mayor of London has continued to push for bigger affordable housing contributions. As a result, in contrast with the nearly 24,000 homes built in London during 2015, 2017 levels are expected to fall back closer to 16,000,’ he continued.
Moving on, Mr Frost said: ‘The challenges for the Mayor to use public land, planning and investment to stimulate supply are steep. There is much to be encouraged by so early on in his tenure, but his oft-used phrase of it’s a marathon, not a sprint is only too true. A strong, stable political backdrop for housing policy aligned with the creation of the new London Plan and Government White Paper will be an important handrail for an industry in need of guidance.’