Welcome back to the Experience Invest, where we discuss the latest trends in residential property, student accommodation and care home investments. Today’s blog focuses on some new research that predicts UK property prices will grow by an average of 17% in the next five years.
The research, which has been compiled by Savills – the international real estate agents, suggests that economic recovery in the UK housing market will vary geographically. The figures are based on interest rate rises, regional economic growth, and mortgage regulations.
Five year forecast
Savills’ report forecasts that by the end of 2020, we will see prices rise by varying degrees, depending on location. On average, however, we can expect a 17% increase in the cost of a homes across the country.
The firm believes property prices in the South East will rise the most, and predicts growth of 21.6%. In comparison, prices in the North East will rise by only 12%. The figures are reliant on mortgage rates not exceeding 4.5%.
Dependent on interest rate rises
Lucian Cook, Head of Savills Research says growth will be largely dependent on the speed that interest rates rise.
“If rates rise too quickly mainstream house price growth will be quickly curtailed. On the flipside, if rates remain low for too long, there is a risk that prices will rise too far, creating affordability issues further down the line when they do eventually rise,’ explains Cook.
Growth will vary geographically
Mortgage regulations mean the amount people can borrow is relative to their income, which Cook believes will ‘cap price rises’, especially in London. Growth in London is likely to be in the region of 15%. If this is the case, we’ll see London underperforming compared to the overall UK market. Interestingly it seems we’re likely to see more growth in ‘outer London boroughs’ compared to central London.
Growth in the North will be determined by regional wealth generation, and whether the housing market in cities such as Manchester, Birmingham and Leeds, and surrounding regions, become revitalised.
About Experience Invest
Experience Invest is a London-based independent property specialist. We focus on sourcing real estate opportunities across the UK. Our specialisms include residential investments, student property and care home investments. We work with clients in the UK and internationally. The company is regularly featured in the press, including in The Telegraph newspaper, on Yahoo Finance, and by the global news organisations Reuters.
Experience Invest recently announced the launch of One Wolstenholme Square, a brand new residential development in the heart of Liverpool. If you are interested in finding out more about this exciting residential investment opportunity please visit the website for full details.