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Summary of the Housing Market Price Forecasts 2014 - 2018
Here are the comments from the key forecasters to 2018:-
Savills “Hubble, bubble, toil or trouble? It is difficult to find hard evidence of either a widespread housing boom or a bubble.”
Knight Frank “UK house prices are set to rise by 24% by the end of 2018, our forecasts show, although once inflation is stripped out, the real expected growth in prices is 14%.”
Hamptons “We expect house prices in London and the South of England will continue to outperform the average for England and Wales.”
Chesterton Humberts “Chesterton Humberts do not expect there to be a property bubble in the short term. Average national house prices to rise by 8.2% in 2014, outperforming London at 8.1%. National house prices to average 6% per annum growth over the next five years, Prime London to average 9.7%.”
Jones Lang LaSalle “Jones Lang LaSalle predicts UK house price growth of 5% in 2014, with 8% growth in London.”
From my perspective, property price forecasts are always difficult and many of these won’t have taken into account the loss of the funding for lending scheme for borrowers. It’s likely that property prices may not increase quite as much as these forecasts suggests if mortgage rates start to rise for new and those re-mortgaging in 2014.
However, what is good news is in some areas where we have seen prices fall by anything from 25% to 50%, the idea of at least clawing back the losses over the next five years is good news.
The rises if accurate are good for First time buyers. They allow them for FTBs to buy a property which then grows in value over the first few years. This means it’s a good time to buy as it will help add some equity over the first years and with most on repayment mortgages, this will help to reduce their need for 5-10% deposits in the future.
Investors too can be pleased. Although it will be tough to get new deals, it will mean property prices over the next few years will be ahead of inflation. However, it’s important to be aware that in some areas this will just mean investors recover their position to 2007. For those who bought in 2006 and 2007, it means they will have ahd 5-6 years of zero growth when inflation has been growing at 3%.
Overall, if the forecasts are accurate property prices look like they are going to grow sensibly overtime. All we need now is for employers to increase people’s wages again, at least in line with inflation as the issue of a low growth in wages is impacting on people’s ability to buy a home in their area.”
