How have the forecasters performed in 2020?

publication date: Nov 4, 2020
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

How have the forecasters performed in 2020?
The year of Covid-19

          Savills 5 Yr                 JLL 5 Yr     PwC
Property Price Forecasts  Savills Savills UK HPI Savills compound   Knight Frank UK HPI Knight Frank   JLL JLL UK HPI cumulative PwC UK HPI 2021-2022
  2020 2020 Actuals 2020 H2 growth   2020 Actuals 5 Yr Forecast   2020 2020 Actuals growth 2020 Actuals (average)
Date of publication/source (Nov 19) (Jun 20) (Jun 20) (Oct 20) (Oct 20)   (Dec 19) (Jun 20) (Dec 19)   (Nov 19) (May 20) (Jun 20) (Nov 19) (Jul 19) (Jun 20) (Jul 19)
UK 1.0% -7.5% 3.4% 4.0% 20.4%   2.0% 3.4% 15.0%   1.0% -8.0% 3.4% 14.8% 2.1% 3.4% 3.0%
London -2.0% -7.5% 1.3% 1.5% 12.7%   0.0% 1.3% 13.0%   1.0% -8.0% 1.3% 17.0% 1.0% 1.3% 3.2%
South East 0.0% -7.5% 1.0% 3.5% 17.3%   2.0% 1.0% 17.0%   0.5%   1.0% 14.8% 0.4% 1.0% 3.1%
South West 0.5% -7.5% 2.0% 3.0% 17.3%   1.0% 2.0% 13.0%   1.0%   2.0% 15.3% 1.7% 2.0% 3.1%
East of England 0.0% -7.5% 1.2% 3.5% 17.3%   2.0% 1.2% 17.0%   0.5%   1.2% 16.4% 0.9% 1.2% 2.4%
East Midlands 3.0% -7.5% 4.2% 1.5% 22.6%   2.0% 4.2% 14.0%   0.5%   4.2% 14.2% 3.4% 4.2% 3.2%
West Midlands 3.0% -7.5% 4.3% 1.5% 21.7%   1.0% 4.3% 13.0%   0.5%   4.3% 12.0% 4.1% 4.3% 3.2%
North East  1.5% -7.5% 1.8% 0.5% 21.7%   1.0% 1.8% 11.0%   0.0%   1.8% 9.8% 1.8% 1.8% 3.0%
North West  2.5% -7.5% 2.5% 0.5% 27.3%   2.0% 2.5% 13.0%   1.5%   2.5% 16.5% 3.8% 2.5% 4.2%
Yorks & Humber 2.0% -7.5% 3.8% 1.0% 24.1%   2.0% 3.8% 13.0%   1.5%   3.8% 15.4% 3.1% 3.8% 3.7%
Wales  2.0% -7.5% 3.6% 1.0% 22.3%   2.0% 3.6% 13.0%   0.5%   3.6% 11.5% 4.2% 3.6% 4.0%
Scotland 2.0% -7.5% 0.4% 2.0% 25.4%   2.0% 0.4% 13.0%   2.0%   0.4% 14.2% 2.4% 0.4% 4.7%

 

Initially, it’s perhaps a little unfair to see how the forecasters have performed versus the ‘actuals’ from the Land Registry for the first six months of the year, but it’s still a good exercise to do as it shows us how the market has performed so far - despite Covid, and overall, it’s done ridiculously well!

Savills’ estimates for 2020 price growth ranged from a -2% fall in London through to a +2% rise in areas such as Wales, Scotland, Yorkshire and Humberside. Their ‘Covid’ forecasts, produced in the early days of the crisis during lockdown, then suggested prices would fall by -7.5% this year,and their revised forecasts in June were actually BETTER than the November forecasts.

Overall, they are now predicting that prices will rise from +0.5% in the North East and North West (previously a +1.5% and +2.5% rise) through to a +3.5% rise in the East of England (previously no change).

The interesting forecast is the five year forecast, which has hardly changed, suggesting that the current ‘blip’ in property pricing will be rectified once Covid is over.

Verdict on Savills actual versus forecasts: their 2019 forecasts look light compared to actuals so far this year. Their latest revised forecasts from June though, apart from a few areas such as London, also look a little light.

Knight Frank estimates for 2020 property price growth suggested rises of +2% for most regions, with some not performing much at all, for example London, South West and the West Midlands not rising at all or just by +1%.

Verdict on Knight Frank’s actual versus forecasts: as with Savills, the forecasts are actually looking a little light for 2020, with actuals so far suggesting an average rise for the UK of +3.4% versus their average of +2%. Versus their forecast, the Midlands in particular is doing a lot better than anyone expected.

JJL estimates for 2020 show very little growth was expected for 2020 across the country. Price rises ranged from +0.5% to +2%, the most pessimistic of all the forecasters on our list. They then predicted an 8% fall this year, but currently, so overall their forecasts have been very light for this year, with London and the South East being the most likely to be about right this year.

Verdict on JJL estimates for 2020: too pessimistic

PwC estimates for 2020 ranged between +0.4% rise in the South East through to a +4.2% rise in Wales. They were one of the few forecasters that recognised the opportunity for growth in the Midlands, with the East Midlands forecast for +3.4% and West Midlands for +4.1%. Versus actuals these are pretty spot on. 

Verdict on PwC estimates for 2020: pretty easy to be honest, the star performer so far this year!
 

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