Greater London, the South East and the East of England are set to see the highest levels of property price growth in the UK over the next five years, according to the latest 2017 outlook report.
London could see prices grow by 16.5%, the South East by 16% and the East of England by 14.2%, says the analysis report from Strutt & Parker.
However, it points out that going into next year thing are more uncertain because of global event such as Brexit, the US Presidential election results and economic concerns. There are also elections in France, Germany and the Netherlands coming up in 2017.
is set to experience the greatest levels of price growth (16.5%), followed by the South East (16%) and the East of England (14.2%) – all will return double digits. The differing of opinions between forecasters going into 2017 is an indicator of the uncertainty currently going on in the market, things are far more difficult to predict than usual because of the high number of upcoming global events.”
‘Article 50 may or may not be triggered by the end of March 2017 – we just don’t know at the moment and so the potential impact is difficult to call. It is crucial that we view the UK through the prism of global investment stability,’ said Stephanie McMahon, Strutt & Parker’s head of research
‘With so many unknowns, we need to go back to looking at the fundamentals of the UK’s property market. When compared to the rest the world, we have benign corporation tax, mid-level residential property tax, a favourable GMT time zone, we speak in the international business language and have huge depth of markets and skills. As a result, our economy is currently holding up better than perhaps many expected following the European Union referendum,’ she pointed out.
She explained that 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,’ added McMahon.
The report suggest that 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,’ McMahon explained.
She also pointed out that the prime central London market 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 and this trend is expected to continue into 2017.
‘As is typically the case in a slow market, the volume of transactions in prime central L has been very low. We are seeing more and more examples of sellers prepared to review their pricing and entertain reasonable offers, so it may be that the market has found a new level which will spur transaction levels,’ McMahon added.
‘This could result in a lessening on the downward pressure on prices. We are predicting flat growth for prime central London in 2017 as a best case scenario. However, we expect the market to continue to experience low levels of activity as buyers and sellers alike wait for more certainty on the economic outlook,’ she concluded.