Major excitement: Savills property price, rent and tenure forecasts are out!

publication date: Nov 10, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

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Savills property price, rent and tenure forecasts are out! 

I love this time of year and it’s not because it’s nearly Christmas when even I tend to take a bit of a break from property, it’s definitely because the forecasters are out.

And there are few better reads and predictions than Savills to know what’s likely to happen to the value of your first home, your buy to let portfolio or know when your property may grow in value enough to be out of negative equity.


So here’s the key facts and figures:-

UK house price growth to slow to +2% in 2015, +19.3% to end of 2019

A 19% rise in property prices over the 5 years will ‘sound’ enormous, but based on a 2% increase in 2015, that’s less than half the annual rate of growth we’ve seen on average in the last 15 years.

Slightly more worrying is for the one in two people who own a property outright, this means their cash asset will hardly be worth anymore in 5 years time, in real terms than it is now.

Read my - How to buy a property below market value checklist


London to flatline having hugely outperformed the rest of the UK 

Savills expect property prices in London to end 15% up at the end of 2014 versus 2015, but considering we’ve seen rises of 20% in many Boroughs, that means prices dropping back over the next few months.

For those who gave up the mad ‘post-recession’ dash for property in the last 18 months, now may well be the time that Xmas bargains aren’t just available on Santa hats and Stocking Fillers!

Read my - How to work out your property market checklist


Is now the time for £2 million+ potential downsizers to ‘get moving’ to avoid the mansion tax?

Well I guess this rather depends on how well Mr Milliband and his crew do, but assuming no mansion tax, it might be worth hanging onto those posh properties as by 2019 prime house prices are predicted by the super Savills research team to rise +22.7% in London and +23.9% as a UK average.

Just in case though, the impact on properties if the tax comes in, Savills believe could end up with property price falls of -5% across prime London in 2015, -3.0% regionally initially, but values could recover in 2016-17.

And not great news for the property porn homes of London in that £1-2m homes could fall -2% in 2015 despite not being directly affected by a mansion tax.

Read my - Choosing the perfect home checklist


Errr, did anyone think of changing the Council Tax instead?

A bit of a no brainer really would be to increase council tax for homes over £2million instead of slab taxing and causing prices to falter. Savills also point out “a revision of the council tax system would be more equitable, without the potential unintended consequence of impacting owners of lower value homes or the equity rich but cash poor”.

However, the issue is the time and cost of revaluing all homes and is that really something taxpayers want to pay for?

This year’s ‘new kid’ on the block which is expanding rapidly in our new global and modern world is the Private Rental Sector. Don’t be fooled that this is growing because of affordability issues. Yes they are impacting, but so is the growth of sectors who would normally rent including:-

  1. Students
  2. Immigrants
  3. Divorcees

And Savills expect to see “1.2 million more households in England & Wales will be private renters by 2019” That’s an enormous 24% of all homes!

And more in our Capital city as the estimates are by Savills there will be ca 250,000 more private rented homes, rising to 1.24m or 36% of all homes. That will be interesting as in the next five years, the plans are to increase the number of new homes by a mere 40,000 a year – so cracking plan by government, politicians waiting in the wings and local authorities “lets build less homes than we need, like we have for the last 30 years, that’ll help the housing crisis won’t it.

Well, no it really won’t!

Anyway, hope you enjoy these forecasts as much as I have, looking forward to sharing what’s happening in each region over the next week or so.


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