A new piece of analysis suggests that UK property price growth will amount to just 1% during 2017, as the slowdown since summer 2014 continues.
In central London, where the slowdown has been more prominent, prices are predicted to fall slightly over the course of the year. Looking ahead however, values here could rise by 14.2% by 2022, according to the research from international real estate firm Knight Frank.
Property Price Rises
The firm’s research indicates that prices will rise across Britain by 2.5% in 2018, 3% in 2019 and 2020 and by 4% in 2021.
In the capital, with prices falling by 1% this year, values are expected to rise by 2% next year, 2.5% in 2019, 3% in 2020 and 5.5% in 2021.
Rents are forecasted to continue their steady rise – increasing by 1.4% this year, 2% in 2018-2021 to reach a cumulative 9.8%.
However, the report highlights the uncertainty surrounding the performance of the UK property market, such as Brexit and the slowdown in economic growth.
UK property values to increase by 1% in 2017
A recent slowdown in market activity can be attributed to a lack of available properties to purchase, which in turn has put more focus on the delivery of new-build homes across the UK.
Data from the Department of Communities and Local Government (DCLG) indicates that the number of new properties being built over recent years has increased. This said, levels are still way below those required to meet current demand.
The report reads: ‘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.’
‘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.’