Cautious predictions of housing market confidence and growth
The housing market should start 2020 with a new mood of confidence – but continued political uncertainties will keep a lid on property prices, economists predict. Several predictions for house price growth across 2020 are clustered around the 2 per cent mark.
Experts said the Conservatives’ recent general election win could help to bring more certainty to the market and unleash some pent-up buyer demand. An abundance of low-rate and low-deposit mortgage deals should also support activity. Some estate agents are even sensing there may be a “Boris bounce” for the housing mar- ket, which could in the coming months have an effect on house prices.
Lucy Pendleton, founding director of estate agent James Pendleton, said: “Not yet visible is the Boris bounce in house prices we all sense is already well underway.” However, Brexit concerns could also pick up as 2020 progresses, making people behave more cautiously, and affordability constraints will also cap price growth in some parts of the UK, economists said.
Howard Archer, chief economic adviser at EYI tem Club, said the Conservatives’ strong election win could ease some uncertainties and help house prices rise by around 2% in 2020. But he said the economy still looks set fora“challenging 2020”. Mr Archer said: “There will still be appreciable uncertainties, including on the Brexit front – so that the upside for house prices in 2020 is likely to be limited.” Rightmove also predicts that the price of property coming to market will increase by 2 percent in 2020. It said there is now an opportunity to release some pent-up buyer demand that
had been building before the general election. House sellers’ pricing power will be boosted by a lack of other options for potential buyers, Rightmove suggests.
Lawrence Bowles, senior research analyst at Savills, said:“At the top end of the market in particular, we’ve seen a strong build-up of new buyer demand. “Greater political certainty will unlock some of that demand, but with less than a year to agree a Brexit deal, there are still many unknowns. “Asaresult, we expect average house prices to rise by just 1.0% in 2020, and a higher 4.5 per cent in 2021, as improving certainty translates into higher growth in wages and GDP.”
Looking further ahead, Savills predicts the NorthWest of England andYorkshire and the Humber will have the fastest house price growth over the next five years.
Original article by Vicky Shaw – The Scotsman