Blue-chip real estate market set to explode | David Sapsted
Robust economic growth and a housing shortage in the market are expected to lead to a 3.5% increase in UK house prices in 2022, according to estate agents Savills.
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Next year, back to the trend
Savills predicted that real estate transactions – which peaked at 1.5 million this year – would fall back to normal levels in 2022.Lucian Cook, Head of Residential Research at Savills, said: “After such intensity in the market and without the imperative of a stamp holiday, we know there will be less urgency in the market to go. from 2022.“In fact, we have already seen house price growth over three months return from 3.9% at the end of June to 1.7% at the end of September.“With the prospect of inflationary pressures continuing next year, leading to the first expected interest rate hike, we expect price growth in the near term to be somewhat more subdued than we have seen recently. “
House prices by region
Broken down by region, the report says the North West, Yorkshire and Humberside could see an 18.8% increase in house prices over the next five years, while prices in Wales could rise by a similar amount.London, which already has by far the highest prices in the country, is expected to experience the weakest growth, at around 6% over the next five years, while south-eastern England and East Anglia are expected experience growth of around 10% by 2026.Lawrence Bowles, Director of Residential Research at Savills, said: “Given where we are in the housing market cycle, the north-south divide in house prices is expected to narrow further over the next five years.“There remains an affordability cushion beyond London and the South. The government’s level-to-the-top agenda has the potential to accelerate a market rebalancing, but only if it gains traction.
Leveling hits London prices
Mr Bowles said the potential for price growth would be more limited in the London market, with only 2% growth expected next year.“This reflects the extent to which London prices have become dislocated from the rest of the UK property market due to strong price growth from 2005 to 2016, something so pronounced that it is expected to further limit price growth in large parts of the capital a decade later, “he said.However, the report says central London’s main market is expected to benefit from growing overseas demand as travel restrictions linked to the pandemic eased and international travel resumed.
Mobility boosts London’s leading market
Main market prices in London are expected to rise 8% next year and almost 24% by 2026.Frances Clacy, Research Analyst at Savills, said: “We have already seen the beginnings of this recovery, mainly driven by demand for larger homes and, as such, by locations such as Notting Hill and Holland Park.“But, renewed demand for apartments in the second half of 2021, especially from those looking for a pied-à-terre, suggests that growth should become more balanced, both in terms of location and size. type of property, in the future. “
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