How the property market will look in 2019: house prices forecast to rise across Britain over next two years.
Brexit is still the “biggest risk” but lack of supply means prices are unlikely to drop, says new report.
House price growth has slowed and the outcome of Brexit negotiations remains uncertain, but property values in all British regions will still rise above this year’s figures by 2019, according to one of the UK’s biggest estate agents.
Countrywide predicts house prices will rise by just 1.5 per cent — at below inflation this is a real terms fall — across Britain this year.
They are expected to increase by a further two per cent by the end of next year and three per cent by the end of 2019.
This means it will take three years for property owners to see a similar level of growth as in just one year in 2016.
However, a lack of supply will continue to support house prices, says the report.
Buyers are choosing to stay put — or are forced to continue renting — because affordability levels are still stretched to the limit due to price and rent rises vastly outpacing wage growth.
Stamp duty changes have also pushed the number of buy-to-let purchases down.
However, demand still outstrips supply because the rate of new building is not expected to gather enough pace over the next two years to catch up with previous shortfalls.
“Economic conditions for households will remain challenging over the next year as inflation eats into budgets and interest rates begin to rise,” says Countrywide’s chief economist, Fionnuala Earley.
“But we expect the UK economy to recover and wage growth to pick up in response to global growth.”
According to the report, the biggest risk to the pace of recovery will be Brexit.
“The housing market is sensitive to confidence which will be affected by the outcome of Brexit negotiations and the implications this will have – particularly on employment,” says Earley.
The latest house price report from Rightmove, which records asking prices, support these predictions, with prices up 1.6 per cent in London compared to this time last year.
The average asking price of a home in inner London (Zones 1 and 2) is £795,000. The average asking price in outer London is £518,000.
Meanwhile, average asking prices across England and Wales rose 3.1 per cent to £314,000 over the 12-month period.