Savills anticipates prices will fall 1.5 per cent in 2017 and a further two per cent in 2018, before stagnating in 2019 due to continuing uncertainty surrounding Brexit.
However, the forecast says £33,000 should still be added to house prices in the capital over the next five years, with a five per cent boost anticipated in 2020, the year after Britain officially exits the EU, provided employment, wages and GDP grow as expected.
That will put the average London house price at just over half a million pounds by 2022.
Predicted Five Year price increases:
North East 17.60%
Yorks and Humbs 17.60%
Wales 15.90 %
East Midlands 14.80%
West Midlands 14.80%
South Wsst 14.20%
East of England 11.50%
South East 11.50%
Source: Savills Research
“London’s housing market has been pushing up against the limits of mortgage regulation and affordability for some time,” says Lawrence Bowles, Savills research analyst.
“The Brexit vote was the tipping point that slowed price growth. Weakened sentiment, combined with expected interest rate rises, now point to small, short-term price falls next year.
“Greater economic and political certainty should trigger a return to growth in 2020, though this will be capped by borrowing constraints as gradual increases in the cost of mortgage debt impinge on affordability.”