Experts predict modest price rises through 2020…

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House prices:

The Conservative election victory may produce better days for the housing market, just like the stock market, which has seen a terrific bounce, but there are doubts this can be sustained.

Reports in the press
encouraged by estate agents are lauding the idea of another property
boom in the wake of this remarkable election result, but some market
analysts are urging caution.

According the Royal Institute of Chartered Surveyors (RICS) a so-called “Boris bounce” will likely produce a short term improvement in sentiment and thinks Simon Rubinsohn, its chief economist, “But I don’t think it will amount to a great deal,” he has said.

The Brexit trade
negotiations, far from being over, are just about to begin in
earnest, which could mean continuing uncertainty and a bumpy ride
throughout 2020. Affordability remains a big issue, which RICS says
“means the likelihood of a material pick-up in activity during2020
seems unlikely.”

RICS and Knight
Frank are predicting a modest growth of 2% over 2020, with sales
volumes “broadly flat”, whereas the Halifax and Zoopla are
predicting between l$ and 3% growth. Savills is more cautious at just
l% growth.

There is likely to
be a boost in purchases by overseas buyers ahead of the introduction
of a 3% surcharge on foreign purchases, expected to be announced in
the Spring Budget, however, London growth is expected to trail that
of the rest of the country. There, property prices are still high,
but cheap money is maintaining the capacity to buy.

The rental market
should fair better: growth here is expected to outstrip housing price
growth throughout 20220. RICS sees around 2.5% rental growth being
achieved nationally, with perhaps around 3% in London.

Longer term, Knight
Frank sees increases of 1O% over the next 4 years nationally, and
15% in the Capital. Landlords selling following a period of tax
increases, mortgage lending restrictions on buy-to-let portfolios,
and more onerous letting regulations means that supply is
diminishing.

Some experts are
prediction “runaway rents”, increases because of this reduction
in supply which would put increasing burdens on the young, unless the
new government can introduce reforms quickly.

Longer term Knight
Frank makes bold predictions, with national prices rising by 15% to
2024, and by 18% in prime central London.

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