Despite the fact that many experts believe UK house prices will fall in 2015, a new survey today by Rightmove in conjunction with experts at Oxford Economics predicts that UK house prices will rise by 30% over the next five years. This would seem to go against the short to medium term trend forecast by other experts who believe that the UK market will slow down while funding indicators catch up. So, what does this new survey forecasts for different areas of the UK?
Before we look at the different areas of the UK, which are seen as boom and slow growth areas, it seems that the ripple effect from the London real estate market will be a major factor together with the improving economic situation across the UK. Some experts believe that the monumental growth in London property prices will see many investors cashing in their chips and moving out towards areas which are within commuting distance. There are also many other areas of the UK which appear well set for short to medium term growth which could attract the attention of investors.
While UK property prices are forecast to grow by an average of 30% over the next five years this survey estimates growth of 42.9% in Southampton, 41% in Luton, 40.6% in Brighton, 40.4% in Swindon and 39.5% in Enfield. By any stretch of the imagination these are significant returns on investment over a five-year period and if correct we could see a number of investors shifting their money in the short term.
Quote from PropertyForum.com: “Over the last few days there has been much discussion about the new land and building transaction tax brought in by the SNP government in Scotland. This replaces stamp duty on all property transactions across the country and the detail is very interesting and marks a distinct change in policy going forward.”
There is some speculation that many of these hotspot areas are playing catch up from disappointing performances in years gone by although as we touched on above there is no doubt the London ripple effect is playing some role in this changing environment.
Slow growth areas
Interestingly West London is forecast to be the slowest area for property price growth over the next five years at just 13.6%, Carlisle comes in next at 17.4%, Lancaster 18.1%, Manchester 18.8% and Northampton 20.5%. Interestingly it seems that the north-west of England is not going to participate in the ongoing property price boom in the short to medium term. Quite why this is remains to be seen but slower predicted growth in these areas may exacerbate local economic challenges.
However, we must also remember that over the next five years the economy could perform very differently to today’s forecasts, property markets can be volatile and we also have an election next year.
Why are forecasts so varied between different experts?
Just last week experts were suggesting a rise in property prices in 2014 followed by a fall in 2015. Now we have a new survey by a prominent online estate agent backed up by economic experts suggesting an average rise of 30% in UK property over the next five years. It is difficult for homeowners and investors to get an angle on the UK property market when we see such differing opinions. However, the fact remains that through the good times and bad times the UK property market does seem to retain a fairly strong backbone.