2019 House price predictions

Hunter Finance has the data from over six years of valuing development projects and their expected and / or achieved sale value.

Although we finance a relatively small number of projects, we value and assess literally hundreds of property builds a month all based on final property prices.

As it is our money we are lending then it is doubly important to get it correct. All our development finance proposals are backed by local land and property surveyors who act to confirm our price findings. We also have historical data and custom software to complete our predictions and LTV calculations.

Growth in house prices in the United Kingdom (UK) prediction

House price annual change

2018

-2%

2019

5%

2020

7.5%

2021

3%

 

We predict a new upswing in property prices

Although it is anybody’s guess where the Brexit negotiations are heading and what the ramifications they will have on house prices, we predict a new upswing in property prices fueled by the very increasing  demand create though professional immigration into the country.

Many pundits are wow and betide when it comes to the unaffordability of first time buyer homes and how this class of younger buyers are never going to get on the housing ladder. This is true in most cases in the South East without help from the bank of Mum and Dad.

However as the number of professionally trained immigrants or skilled migrants into the country and the demand for the skills they offer are so high (see Demand for high-skilled migrants overtakes new UK limits | Financial Times) that this new class of people is forming the backbone of first time buyers. As these workers can expect to achieve high salaries (compared to the average 25+ British worker).

Many overseas investors are likely to play a waiting game, certainly in the first half of the year of 2019 but when the post Brexit blues have worn off and people stop believing what they read and see that in a post Brexit world there really is only one change and that is good. Good news for the economy and good news for house prices.

 

What the ‘experts’ say (2018-19)

All of the experts listed below need to be taken with a pinch of salt as of course they have a vested interest in the property market becoming more buoyant. Ultimately you could argue that they talk up prices as that gets sellers excited, who is not a little smug when told that their property has gained another £100,000!

But the reality is that the market in 2017-8 has been sluggish. This is bad for business, including ours!

Estate agent Jackson-Stops believes that prices will remain flat in 2019 with higher value homes continuing to feel the strain of stamp duty.

Price Waterhouse Coopers is rather more bullish, believing that average UK house prices will rise by four per cent a year until 2025 and then possibly flat-line.

Strutt & Parker predicts that, in the UK as a whole, there will be house price growth of 2.5 per cent in 2019, but that in London, prices will remain falling or at best flat.

The Halifax’s latest ‘house price optimism index’ a very rough guide to what people are expecting to happen to house prices – fell by 14 per cent between April and October, with one in five of those surveyed expecting house prices to fall in the next twelve months.

Savills is predicting that house prices in the UK will rise by one per cent in 2018. “Uncertainty over what Brexit means for the UK economy and how it will impact on household finances will increasingly act as a drag on house prices,” says Lucian Cook, Savills Director of Residential Research. It was not clear if they expect this rise to continue into 2019.

Knight Frank is also predicting that house prices in the UK will grow by one per cent in the course of the year.

At the other end of the scale, business consultancy Morgan Stanley is predicting a 1.6 per cent drop in values next year.

 

We can all be experts, although none of us have a crystal ball. All we can rely on it whether or not the UK economy is going to improve post Brexit or not, whether or not the UK can attract the right professional migrants whose salaries the country can build a new wave of first time property buyers.

I believe we can and that is why I am predicting a 5% rise in property in 2019 with that rise increasing into 2020.

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