Estate agent Savills have released forecast for the UK housing market as a whole and regional variations over the next five years. While it is difficult to predict property prices 12 months in advance, it is brave to look five years in advance, but these figures do make for interesting reading. Whether they are revised upwards or downwards in light of Brexit remains to be seen but let us take a look at what Savills expects of the UK housing market.
Savills are forecasting an increase in the overall UK housing market of 2% in 2017, 1% in 2018, 2.5% in 2019, 5% in 2020, 2.5% in 2021 and 2.5% in 2022. This equates to a five-year return of 14.2% between 2018 and 2022. When you bear in mind the current economic difficulties in the UK perhaps this not such a bad return?
It will come as no surprise to learn there are some significant variations on house prices across the board with the best markets for 2017 expected to be the East Midlands, West Midlands and the South West of England all forecast to grow by 5%. Greater London is by far and away the most depressed market with Savills expecting prices to fall by 1.5% in 2017 with a the further fall of 2% in 2018. The performance of UK markets are expected to be subdued in 2018 with the North West, North East, Yorkshire and Humberside and Scotland forecast to top the league tables with growth of just 1.5%. The same four regions are expected to top the charts for 2019 with forecast growth of 3.5%.
The ongoing growth of house price in the North West of England will hit 6% in 2020 with East Anglia and South-East England the more subdued markets with growth of just 4%. In 2021 markets are expected to be a little more subdued with the North West, North East, Yorkshire and Humberside, Scotland and Wales topping the table at just 3% forecast house price growth with East Anglia, South East and Greater London bottom of the charts with growth of just 2%. Unsurprisingly, 2022 is also expected to show subdued growth with the North West, North East, Yorkshire and Humberside, Scotland and Wales yet again topping the table with growth of 3%. East Anglia, South East and Greater London are bottom of the table with just 2% growth in house prices.
Five-year trading performance
It is dangerous take any figures in isolation therefore perhaps a more appropriate measurement would be the forecast five-year performance between 2018 and 2022. Top of the charts is the North-West of England and 18.1%, followed by the North-East and Yorkshire and Humberside at 17.6%, next we have Scotland at 17%, Wales at 15.9%, East Midlands and West Midlands and 14.8%, South West at 14.2%, East Anglia and South-East at 11.5% with Greater London bottom of the table with growth of just 7.1% forecast.
As we suggested above, it is difficult to predict house prices 12 months in advance let alone five years in advance so these figures should be taken with a pinch of salt. However, there is obviously a detailed analysis behind each of the performance forecasts and it does give an indication of the potential for each region going forward.