Even if political uncertainty clears early next year, we only expect a Brexit bounce to gain a foothold in 2021.
Arriving at our housing market forecasts has involved even more head-scratching than normal this year. Amid Brexit uncertainty, fixing the assumptions on which to base them has been like nailing jelly to a wall. More recently, however, the jelly appears to have set firmly enough to get a fix on what the future may hold.
As we publish our forecasts, we know we face a general election on 12 December. Polls currently suggest there is a reasonable prospect that the Conservatives will regain enough of a majority to get the current Brexit deal over the line by 31 January.
This would suggest that the UK avoids an economic recession, providing the platform for house price growth once households have more certainty on the outlook for their household finances. The flip side is the prospect of a long-anticipated, gradual increase in interest rates. This will progressively squeeze affordability at the point of getting a mortgage, especially in London and parts of the South East.
The outlook could change quickly if circumstances dictate that we need to revisit our underlying assumptions Savills Research
On these assumptions, we are forecasting the average price of a UK home will rise by 15% over five years, with a Brexit-bounce only gaining a real foothold at the end of the transition period. We do so knowing that there will be substantial variation across different parts of the market. We also do so knowing that, jelly being jelly, the outlook could change quickly if circumstances dictate that we need to revisit these assumptions.
Read the articles within Residential property forecasts below.
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