House prices in UK forecast to increase by 18% in next five years
Property Wire has reported that house prices in the UK are forecast to increase by 2.5% this year and next with growth rising to 4% per annum over the following three years, to a five year cumulative amount of 18%.
But not all areas will see such robust growth, with the prime property market in London, for example expected to be flat this year, according to the latest forecast from property consultancy Strutt & Parker.
The best case scenario for the prime market in London is for it to pick up in 2019 with forecast growth of 4%, followed by 5% in 2020, and then 6% in both 2021 and 2022, a cumulative growth of 23% and thus outperforming the overall market.
However, the worst case forecast is for prices to fall by 5% this year, remain flat in 2019 then increase by 1% in 2020, followed by 2% in both 2021 and 2022. This would mean no growth over the five year period.
In the lettings market prime central London rents are forecast to be flat this year then rise by 1.5% next year, followed by growth of 2% in 2020 and a rise of 2.5% in 2021 and 2022, giving a cumulative expectation of 10% growth.
Overall, Strutt & Parker says that the residential market remains active as transaction levels for England and Wales are equivalent to this time last year, although levels in prime central London are below what they were last year.
It points out that while the fundamentals of the UK economy remain broadly positive, sentiment remains very cautious. Strutt & Parker has not changed its forecasts for the UK and prime central London performance since the last quarter of 2017.
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