As 2017 comes to a close, now is the perfect time to look forward to what the new year holds for house prices across the UK. At present, the outlook for the housing market continues to improve, with significant gains witnessed across the north of England in particular.
UK house prices 2018
Across the country, figures published by Savills show UK house prices are expected to have increased by two per cent this year, with further gains of one per cent forecast for the coming 12 months.
It is expected that the uncertainty of Brexit will place a brake on the national economy for the foreseeable future. However, once clarity is achieved on the future relationship between Britain and the EU, this is expected to spur a nationwide lift in property values and the overall economic outlook moving forward.
UK house prices graph
As a result, while the prospects for UK home prices may appear slightly subdued for the months ahead, Savills predicts growth in values will rapidly increase from 2019 onwards. This UK house prices graph illustrates the forecast growth of 2.5 per cent, five per cent and 2.5 per cent again in the following three years to 2021 predicted by Savills.
Fionnuala Earley, chief economist at Countrywide, told Business Insider: “I’d say that while the economic conditions we face aren’t ideal, in fact the UK economy is relatively robust with high levels of employment.
“Of course there is uncertainty about the impact of Brexit on UK jobs – which may have an effect on households’ confidence, but people still need to move house for a host of normal human reasons and they will continue to do so.”
Above-average gains for north of England
The Northern Powerhouse cities of Liverpool, Manchester and Newcastle continue to drive upward momentum in the market at present, with the north-west, Yorkshire and The Humber regions all benefiting from improved economic activity.
Research published by JLL forecasts house prices in Manchester, Liverpool and Leeds will rise by more than 20 per cent during the coming four years. This is estimated against a national average for the UK of 13.1 per cent. It means investors in these cities will all benefit from above-average gains in the years ahead.
At the same time, the number of households across the north of England is predicted to grow by more than 200,000 in the next five years, with a considerable push now needed to build the homes to accommodate this growing population.
It all points to a significant upturn in investment that will drive future growth in house prices across the northern regions throughout 2018 and beyond.
London property market forecast 2018
While the north is potentially set for a boom year in 2018, the picture across the rest of the country remains subdued at present. The forecast for the London property market and the south of England in general remain areas of stagnated growth, with markets in this area having now achieved a ceiling in terms of overall prices for homes.
It is important to note that London house prices are not falling and changes to Stamp Duty for first-time buyers may boost house prices in London in 2018.
That said, the recent announcement of a new stamp duty exemption for first-time buyers on properties valued up to £300,000 – for the first £300,000 of homes up to £500,000 in London – could lead to an upturn in market momentum in the new year. Indeed, a growing appetite for properties among first-time buyers could have significant impact for home movers along the full length of the property chain, with an associated rise in property values.
The future for house prices
Overall, the future for house prices in the UK appears a slightly mixed bag with some disparity between the regions. Saying that, investors will be buoyed by the dramatic gains being witnessed in the north of England in particular. It means 2018 will likely see a continued push towards higher house prices in many parts of the UK, with investors set to capitalise on ongoing positive sentiment that could drive considerable gains.