UK house price growth in 2019: what are experts’ predictions?
In what has been a turbulent week, not to mention year, for British politics, recent reports show that UK house price growth grew at the slowest rate in almost six years in November, and much speculation has been made regarding predictions for the property market in 2019. Property firm Strutt & Parker has forecasted UK growth to stand at 2.5 per cent for 2019 – with the 5-year forecast from 2018 to 2022 standing at 18 per cent. According to the report shared on Mansion Global, transaction levels continue to be low due to a lack of supply in the market, all fuelled by Brexit uncertainty. Some would-be sellers are holding on to stock and opting instead to lease their properties until the market shifts once again.
In a poll on the Innesco Twitter page earlier this week, we asked our followers for their opinion on whether the residential market would go up or down in 2019. Out of some 350 respondents, a majority of 53 per cent believe that the market will go down. While 21 per cent anticipate for the market to stay at the same level it is now, only about a quarter – 26 per cent – thinks it will go up. In conclusion, the outlook for the coming year isn’t looking too bright.
There may however be a reason to, in true British fashion, keep calm and carry on – at least when it comes to prime assets. In an article in Property Week this week, property finance provider CapitalRise argues that the clamour around the declining residential market is exaggerated and that prime central London (PCL) property is still amongst the best-performing and property classes in the UK, with a proven track record of resilience. Looking back at previous crashes – the 1989 recession and 2007 financial crisis – PCL bounced back to pre-downturn levels nearly three years faster than the rest of London and the UK as a whole. This is largely because buyers in this segment are looking to invest on a different basis from buyers in other parts of the UK – often drawn to the opportunity to invest at a lower-than-average price. Furthermore, London’s status as an iconic financial and cultural centre will always guarantee a demand for prime assets in prime locations.
As far as Brexit goes, things are very much up in the air – with this week seeing Theresa May postponing the Commons vote on her Brexit deal, to which the EU responded that there is “no room whatsoever” for renegotiations, and the Prime Minister herself narrowly winning a vote of confidence amongst her own MPs by a mere 63 per cent. For the foreseeable future, the potential of a no-deal Brexit or a new referendum will still be because of consumer caution – and any predictions about the housing market will be dependent on what happens on 29 March.
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