Savills have warned that UK property growth may cease to grow over the next year, due to continued economic uncertainty for buyers in the wake of Brexit.
Savills’ report said that weaker consumer demand for property, combined with continued uncertainty after Brexit, would lead to lagging growth for UK real-estate. The slowdown is anticipated to be mitigated by a projected rise of 2 percent in 2018.
According to forecasts, the housing market in London and the East Midlands are likely to take the worst hit, with no projected growth anticipated. In addition, house prices in the North of England, Wales and Scotland are expected to fall across the next year. Conversely, the South of England proved an exception, with an expected growth of 2.5 percent.
Lucian Cook, Savills’ Head of Residential Research commented:
“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,” he said.
“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.”
In addition, Mr Cook anticipates the amount of homes changing ownership would also decrease by 16 percent next year, to just above 1.1 million, and that this trend is likely to continue into 2018.
Mr Cook said he expected first-time buyers to face “significant ongoing challenges in raising a deposit without financial assistance”, and that schemes such as the help-to-buy loans “look like they will need to become long-term features of government efforts to sustain housebuilding and home ownership”.
According to data released by the Office for National Statistics (ONS), expected growth is to be lower over the next five years. Savills anticipate that UK prices will increase by £27,900 by December 2021, to £241,900. The somewhat gloomy projections follow Nationwide’s announcement on Wednesday, which revealed that house prices had stalled for the month of October.