Forecast of the UK property market – price growth over the next five years

Prices for residential property in the UK will continue growing over the next five years across the country. In accordance with the latest forecast from the company of elite real estate Knight Frank, the cumulative increase in the prices of residential property in the UK will be around 18% by the end of 2019.

The rental market is also waiting for higher rents. At that time , as political risks have faded into the background, in the market there is a lack of real estate and presumably, the rental growth will be 2.2% across the UK and 3.5% in London by the end of 2015.

The main obstacle for the rapid development of the real estate market in the UK may become premature increase in interest rates and a slowdown in global economic processes.

According to the forecast, in 2015, property prices in the UK will rise 3.5% within the next year – 2.5% in 2017 – 3% and 4% in 2018 and 2019.

The growth of housing prices in London are unlikely to reach the same heights as in 2014, when the price of property in London has increased over the year by 17%. However, property prices in London will continue to outstrip the growth of prices in the rest of the UK and will grow, according to the preliminary forecast, on 3,5%, 4%, 4,5%, 5,5% , 5,5% accordingly, over the next five years.

A similar pattern of price growth , though somewhat relaxed, is expected in the South-East of England. In 2014, this region showed a price increase of 10.4% . In the same year is expected to increase prices by 5%, and in subsequent years, 3%, 3,5% , 4,5% and 5%.

Luxury properties in London rose by 6.7% last year. But this year, digesting the change in Stamp duty, for the year are expected to fall in the sector of real estate by 1% annually. In 2016, the “Prime” sector of London will recover and show an increase in prices by 4.5% in subsequent years is expected to increase prices by 5% for each year in 2017 and in 2018 and then in 2019 – an increase of 6% a year.

No exception and the sector of rental residential property in the UK, where rents will experience a steady growth from year to year over the next five years. Rent growth is stronger affected by the sector of luxury housing, which will outpace the rest of the market rent of residential property in the UK and will rise in price approximately by 15% by the end of 2019.

® Maxim Savitsky G. 19.08.2015

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