Data on the real estate market in the UK was stronger than expectations

Prices for residential property in the UK rose 0.2% in January 2017 and now they are around 4.3% higher than a year ago, but the forecast for 2017 is still marred by neopredelennosti associated with Brexit. The result is a modest rise in January, as shown by the Nationwide index, the price of residential property in the UK has reached the price of £205240. Practically, the market has seen stable price growth from the date of the referendum in June 2016.

And although the British economy remains quite strong, stronger than expectations, Nationwide economist Robert Gardner believes that the market of real estate of great Britain is far from perfect.

The latest statistics show that the economy in the second half of 2016 did not see the slowdown, and the unemployment rate at the end of 2016 was the lowest over the past 11 years.

In the coming year, there have been faint signs of rising unemployment, however, increased wages. Under condition of strengthening of inflationary processes, which are associated primarily with the weakening of the pound sterling against other currencies, wage growth will be under pressure and purchasing power of Britons will be reduced. All these arguments speak in favor of the fact that the market prices of real estate in the UK is unlikely to grow significantly in 2017. Small the economic slowdown, as the consensus forecast, will prevent demand from local buyers and the uncertainty due to Brexit will not add optimism to investors.

The main drivers of price growth in the market remain acute housing shortage and historically low interest rates on loans, which gives the sellers and realtors a reason for cautious optimism.

Prices for property in London saw a slight decline in 2016, however, the forecast for 2017 is very positive, which is based on the fact that young families will use the scheme of public assistance and affordable loans. Especially benefit those areas where will operate new high-speed railway, Crossrail. Prices in the cities of Manchester, Leeds and Birmingham will continue to grow, reducing the price gap between the North and the South of the UK.

® Alice Morgan. 13.02.2017 G.

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