Savills estate agents says Brexit uncertainty will see valuations stand still in 2017 and rents rise
House prices across the UK could “flatline” next year, says The Guardian, adding: “Uncertainty caused by the EU referendum and weaker consumer sentiment will result in two quiet years in the housing market, according to property firm Savills.”
Savills predicts the average price will not move at all through 2017, followed by modest growth of two per cent in 2018.
Things will improve in 2019, it says, when prices could return to growth in excess of five per cent, but after that, a medium-term economic hit from Brexit will reduce property inflation to two per cent by 2021.
Savills’ forecasts are still better than what was broadly predicted by economists in the event of a Leave victory at the EU referendum and the hefty falls some still believe will happen.
The estate agents’ estimates are in line with a range of other housing indices, but it does not concur with the general perception of shift in buyer demand away from expensive areas such as London to more affordable regions.
Instead, it believes that while London and the Midlands will see no price growth next year, the likes of the north-east and Scotland will see outright declines.
“Only the south of England outside the capital is expected to buck the trend, with growth of up to 2.5 per cent,” says the Guardian.
Lucian Cook, Savills’ UK head of residential research, said: “The effect of Brexit is complicating a natural shift towards the later stages of the housing market cycle, when the strongest growth is seen beyond London and the south-east.”
“What is clear is that the housing market does not like political and economic uncertainty and this points to a lower growth, lower transaction market across the board.”
Cook says first-time buyers will remain under pressure as there will be a shortage of supply and prices will remain high, making deposits still difficult to achieve.
In turn, this will stoke demand for rental properties and prices in this sector will rise much faster than house prices. “Rents will go up by 19 per cent between now and 2021, while house prices will only rise by 13 per cent,” says the BBC.