How much are house prices forecast to rise near you over five years? Savills says property values will drop 7.5% this year but then claw their way back
Property sales will slump more than previously expected and remain subdued into next year, estate agent Savills has warned, as it issued new house price forecasts.
Savills said it expected UK house prices to fall by about 7.5 per cent this year across the UK, with property values recovering at different rates of growth.
While the UK is forecast to see an average 5 per cent house price gain next year, on a regional level property inflation is tipped to be at its highest in the North West, at 8.5 per cent, but lowest in the North East, West Midlands and Wales at 2 per cent.
Over five years, Savills suggests a 15.1 per cent national average rise in house prices, ranging from the North West’s 24.1 per cent gain to London’s more modest 4 per cent rise.
Revised five-year price forecasts: London and the South East will likely lead the housing market recovery because these regions have more jobs in resilient employment sectors
The estate agent downgraded its transactions forecasts for this year, in line with gloomier economic expectations due to the coronavirus crisis. It expects 775,000 house transactions in 2020, down 36 per cent on its previous forecasts in November.
The short-term economic impact of the coronavirus now looks to be greater than originally anticipated when Savills made house price predictions in April.
However, after the freeze on viewings, surveys and valuations waere lifted and the property market reopened just over a month ago, agents have reported doing brisker business than they expected.
House sales were severely hit during the lockdown freeze between 23 March and 13 May. They are likely remain at 25 per cent lower than their long-term average this quarter, to return to normal levels only in the third quarter of 2021, the report says.
This ‘baseline’ scenario is based on economic forecasts by Oxford Economics that expect the UK economy to come back to growth in the current quarter.