Recent predictions for the property market have overall been positive. Since the beginning of January, like most property businesses, we are seeing a marked increase in viewings and buyer enquiries.
In part, this is related to increased optimism following a perceived window of stability post-election, but there are other factors shaping the future market. Interest rate increases are forecasted to be low, which has previously encouraged commitment from prospective buyers. When this is combined with a potential increase in property prices that are coming to market, now is the ideal time for vendors to list their properties.
Over the last 30 years, the amount of data available about property prices and the level of understanding about the property market have both significantly improved, which means when economic changes occur, we can create better predictions for what will happen.
Take a look at some of the predictions, fact and figures from some of the leading economic authorities in the UK:
- Interest rates will remain the same in 2020, or may even be reduced to 0.5% (currently 0.75%). This could improve affordability which may encourage more buyers back into the market.
- Wages are expected to rise in 2020 by just under 2%, which could increase house price growth “between 1% and 2% per year” over the next few years.
- Rents will continue to rise, increasing “total returns on housing from 4.1% in 2018, to 5.7% in 2021.” This means that landlords and investors are in a good position to let their properties.
- The UK Cities House Price Index for December 2019 reveals returning market confidence, with year-on-year house price growth across UK cities hitting a two-year high of 3.9%.
- A review of HMRC data shows that actual sales in December 2019 were up 11% year-on-year.
- Analysis also showed there was a 26% growth in buyer demand during the first four weeks of 2020, when compared with the same period in both 2018 and 2019. Which shows remarkable levels of interest in the market.
- Property price forecasts suggest increases by 2.1% in 2020 and 3% in 2021 respectively.
- There has been a 2.3% surge in the price of property coming to market, which is the largest monthly rise we have ever recorded at this time of year.
- Over 1.3 million buyer enquiries since election, which is up 15% compared to the same period a year ago, suggesting an active spring market ahead.
- 7.4% growth in number of sales agreed, as the early birds act quickly to secure a property.
Roger Martin-Fagg – Economist
- Assuming the weather is normal for the time of year, we can expect 110,000 monthly house sales, which is up from a previous 100,000 per month.
- Price recoveries in London and the South East are predicted, and average selling prices are suggested to rise by 5% across the country.