UK property prices are set for a slow year in terms of growth, with a growth of just 1% estimated for 2018, despite new research suggesting that the period between 2018 and 2022 will see total growth of 14.2%. The research, conducted by Knight Frank, highlights that UK house price growth reached a peak back in 2015, yet has stuttered since then despite still growing. Property price growth is a very important part of the UK property market and economical factors, and so it is essential that we understand how property price performance is likely to be over the next few years.
Findings from the Report
In the report, it can be seen that for many areas within the UK, the next few years are likely to be positive in terms of property price growth. The most growth in the coming years is said to be in the East Midlands and the South West (both 14.2%), the West Midlands and the North West (both 14.8%), the East (15.9%) and the North West (16.4%). Although London is set for a slow year, they are set to see a growth of 13.1% over the coming years, whilst Wales (13.1%), Yorkshire and Humberside (12.6%) and Scotland (12%) are set to see some of the lowest growth.
One of the biggest factors that are currently contributing to property price growth is the fact that there is a large difference between supply and demand for properties. The report states: “The disconnect in some UK towns and cities between rising demand, on the back of stronger economic growth and muted stock levels, is contributing to price growth.”
Different Factors Impacting the Market
Despite there still being a very big difference between the overall property prices when comparing the north to the south, the difference in property price growth has somewhat narrowed. Many regions more to the north of England are outperforming London and the South East, of which are two areas that have long been big players in the UK property market.
As is often the case currently, it is also thought that Brexit continues to cause uncertainty in the property market, with that likely to be the case in the near future until it is all resolved. However, after all is said and done, one of the biggest issues is that many areas of the UK are struggling with the affordability of properties, holding back property price growth.
The report states: “And while interest rate rises will push up mortgage rates, the rates payable on home loans will remain near historic lows in the short to medium term. In the lettings market, rental growth has been slowing for a year. However, as with the sales market, rental performance is dependent on the type of property, as well as its location.”
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