The latest forecast for the housing market in 2017 and beyond includes a warning that Brexit uncertainty will create a slowdown in activity across the country.
The warning, from Strutt & Parker’s head of research Stephanie McMahon, comes as she cautions that there are so many imponderables in the current economic and political landscape – the Trump victory, currency fluctuations and the May government’s negotiations with the EU – that any forecasting is laden with difficulties.
Therefore property fundamentals – benign corporation tax, mid-level residential property taxation, an active skilled labour market – must be emphasised to underline the potential strength of the housing sector, she says.
“In 2017 elements to watch will be creeping inflation and the pressure that it puts on goods and services as well as interest rates. It is important that the government quickly addresses the undercurrent of the Brexit voting and encourages growth in the regions.” says McMahon.
“The ongoing uncertainty around the UK’s exit from the EU will slow down market activity across the UK. That said, the continued weight of international money seeking the UK’s ‘safe haven’ status is likely to ensure investor interest for Prime Central London property in particular” she adds.
“PCL has historically been the primary driver of national house price growth but 2016 has seen the capital being outperformed by other locations – most notably the outer metropolitan area of London, and East Anglia. This trend is expected to continue into 2017.”
Strutt & Parker does not give the fine grain of price and transaction forecasting that has been seen in the past 10 days from Savills and JLL, however, it says that over the next five years capital growth across the UK will range from just 2.2 per cent (in the north east of England) to over 16 per cent (in London).