Property price ‘will rise by 2%’ as a ‘Boris bounce’ boosts the housing market, experts predict
A ‘Boris bounce’ will boost the housing market, pushing up prices by more than 2 per cent, experts predict a burst of confidence and more certainty after the Tory election win will unleash pent-up buyer demand in the first months of 2020, they add.
But experts said that continued political uncertainties, in particular the deadline for Brexit trade talks at the end of the year, will keep a lid on property prices. More flexible mortgages that allow smaller deposits or longer fixed-term rates are also credited with supporting demand for housing in the coming year.
But experts said that continued political uncertainties, in particular the deadline for Brexit trade talks at the end of the year, will keep a lid on property prices.
Several predictions for house price growth across 2020 are clustered around the two per cent mark, rising to around 4.5 per cent in 2021.
Last year, UK house prices grew at the slowest rate for six years, rising at a rate of 0.7 per cent in the year to October.
Lucy Pendleton, founder director of estate agent James Pendleton, said: ‘Not yet visible is the Boris bounce in house prices we all sense is already well under way.’
However, Brexit concerns could also pick up as 2020 progresses, making people behave more cautiously.
In October, economists predicted a No Deal Brexit could lead to an immediate five per cent fall in house prices.
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.’
Looking further ahead, Savills predicts the North West of England and Yorkshire and the Humber will have the fastest house price growth over the next five years.
House prices in these areas were slower than those in southern England to recover after the financial crisis – meaning there is still more room for growth.
Nitesh Patel, Yorkshire Building Society’s strategic economist, said: ‘Sales to first-time buyers are buoyant and now account for around half of all house purchases.
‘A strong jobs market and low mortgage rates are likely to support the market, but concerns around affordability may limit the number of people wanting to move home.’
Howard Archer, chief economic adviser at EY Item Club, said the Conservatives’ strong election win could ease some uncertainties but Brexit would ‘limit’ price increases.
Russell Galley, managing director, Halifax, said housing market prospects for 2020 look ‘a bit brighter’ than in 2019.
He added: ‘However the shortage of homes for sale and low levels of house-building will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.’
Original article by Tom Witherow – The Daily Mail