As it unveils its 2020 cross-sector forecasts, Savills notes that it has seen remarkably little distress in the property market since 2016 (with the exception of the retail sector) with many markets functioning at normal or above normal levels. A ‘Brelief Bounce’ may therefore not be as forthcoming as some may expect, says Savills, as where prices have fallen substantially this has been less linked to political uncertainty and more to structural change.
For example, while retail property has undoubtedly been affected by Brexit uncertainty, according to Savills the most significant contributor to falling prices and transactional volumes in the retail sector has been ecommerce and omni-channel retailing, rather than a lack of consumer confidence (which Savills observes has been relatively stable). In the mainstream residential property market, meanwhile, the weakest performing areas have been those where household affordability has been stretched and economics are expected to continue to drag on the market, regardless of an end to Brexit-related uncertainty. The equity driven prime central London market will be the exception, with price growth projected to reach 20.5% over the next five years.
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