UK House Prices Will End 9.5% Higher This Year

UK house prices will end the year 9.5% higher than they started it, but the strength of increases this year means that in London the market could flatline in 2016, property firm Savills said on Tuesday, as it revised its forecasts for the next five years.

The firm had predicted a 6.5% increase in prices across the country in 2014, but said that growth had “exceeded all expectations”. As a result it has revised up its forecast for the current year, and its prediction of total growth by the end of 2018 to 25.7% from 25.2%. Its five-year forecast assumes mortgage rates will have risen to an average of 5% by 2018.

In London, where the major house price indices all showed annual growth of around 20% at the start of the summer, Savills said it expected the rate over the year to hit 15%, far in excess of the 8.5% it had originally forecast.

However it said strong growth this year has left less capacity for further mid-term growth in some markets. Despite this year’s strong performance, it has left the five-year forecast for London unchanged, at 24.4%, and revised down that for and the wider south-east from 31.9% to 31.6%.

In London, Savills said it now expected prices to grow by 5% in 2015, down from a forecast of 6%, and to remain flat throughout 2016, rather than recording a 4% increase as it originally predicted.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza