Property transactions will continue to slide before ticking back up by 2022, Savills has claimed. But even then, transactions will still be around 500,000 below their pre-crash level.
Savills’ latest five-year housing market forecasts predict 1.19m transactions this year – lower than 1.2m last year – and a drop to 1.13m next year.
In 2019, it forecasts 1.15m transactions, while in 2020, 2021 and 2022 going from 1.17m to 1.19m and 1.2m in each year respectively.
The forecast claims it will be harder for home movers to get the extra cash to move up the ladder, while first-time buyers will also struggle.
It also predicts cash buyers will become more dominant, while the number of buy-to-let investors using mortgages will fall by 27%.
It said: “People will continue to trade up the housing ladder less often as they struggle to accumulate the equity and additional borrowing required, and first-time buyers will remain heavily reliant on the Bank of Mum and Dad or government initiatives such as Help to Buy.
“Cash buyers have become more dominant and this trend will continue. They now account for some 34% of all house purchases, and 45% of the total value of transactions. Although expected to become more price conscious, they will continue to be the largest buyer group, as others struggle to access the market.
“Mortgaged buy-to-let investor numbers are forecast to fall most dramatically, down 27% to just 55,000 by the end of 2022 as tighter mortgage regulations, increased Stamp Duty charges and the phasing out of mortgage interest relief combine to restrict buy-to-let investor activity.”
Savills also predicts that UK house price growth in the next five years will be at 14.2%, with regional variances.
The north-west will grow 18.1% by 2022, with London up just 7.1% over the same period, Savills predicts.
However, the agent claims rental growth will be higher in London over five years, up 17% compared with 15.5% in the rest of the UK.