Although values will fall marginally this year, house prices will start to rise again next year and could increase by as much as 8% over the next three years.
The forecast has come from property consultancy CBRE, which also says that prime central London will continue to outperform the wider housing market, with values increasing by 6% this year and by 22% over the next three years.
Jennet Siebrits, head of residential research at CBRE, said: “Despite the market being characterised by monthly fluctuations, the longer-term outlook for the housing market is fairly static. We don’t expect it to pick up until the economy fundamentally improves.
“Low interest rates are continuing to stave off repossessions and forced sales, but a substantial proportion of would-be buyers remain unable to move. Ultimately, bank lending still needs to loosen further to spur on housing market activity.”
The firm did raise its concerns over the new 15% Stamp Duty rate for ‘non-natural persons’ buying property over £2m, but said it was less worried by the hike to 7% for individuals buying at this threshold.
Siebrits said: “Property prices in prime central London have increased by 30% over the last two years, so the additional expense incurred by the introduction of the new 7% rate has to be viewed within the context of the significant and ongoing price rises in high-value homes.
“However, the new regulation designed to prevent overseas buyers avoiding Stamp Duty Land Tax could have unintended consequences as it also captures UK domiciled companies.”
Comments
It amazes me how many organisations like the CBRE are out there, I'm always impressed by the apparent scientific analysis, as if there is a computer model churning over all the numerous economic permutations like the kind of technology found at the met. Office when the reality is its some no-mark with a pen and the back of a fag packet trying to get noticed and his ego stroked.
Best news I've had this morning. My house will be worth oodles more next year so I can wait to sell it at a huge profit if I'm patient.
Oh damn! I was dreaming again!
@TRUTH
"That just will not happen for decades."
Banks are more likely to likely to make lending criteria even stricter.
The younger generation have absolutely no interest in saving with banks because of the low interest rates and older savers are withdrawing their money in their droves to invest in more lucrative returns in shares or precious metals. The banks by cutting interest rates have cut off their own blood supply. Hardly going thrash out loans when their own funds are so low
"Ultimately, bank lending still needs to loosen further to spur on housing market activity."
That just will not happen for decades.
Doesn't the CBRE spout the same rubbish every 3 months that house prices will massively rise. I always thought they were funded by the builders lobby group but increasingly being used as cheerleaders for that other joke of the Daily Express front page.
has anyone mentioned japan recently?
prices fell 99% in some central tokyo areas and they had zero interest rates and QE
they are still 40% less than 1991
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Carry on ignoring the signs you very smart people, your crash hasn't happened and the grown up world has adapted to a new economic way of doing things.
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OMG....why work lets just print money
If jo public....using average prices (or average wages) in this argument is pointless.....There has been substantial reductions in prices in some regions outside london and south east. I am no a HPC'er (i dont want it to happen or think it prices will crash ) but what makes he UK different from any other country where ther have been house price crashes......why will it not happen here? It has happened in Ireland Spain and USA....and in Japan (no i am not Dave)
My prediction has and continues to be a long drawn out slow correction on the affordability scale only a change in the fundamentals that drive price will change this.....I think there is more likelyhood factors effecting price negatively rather than positively.
Nice, this will be the same lot that didn’t predict what’s just happened, like everyone else they don’t know, no one does, especially with this level of accuracy
Jonnie
Daft article .... they are having a laugh
Read some on the comments to the stories they would be re-assured that their local Agent rather than the Pundits and Experts are the ones calling it right.
2 years ago the average house price was £163,000 cheap mortgages, self certification were all available.
TIn those two years prices have crashed by a massive £2k (well short of a 5 or 10 % haggle on £163k two years ago) but mortgage rates are up across the board, self cert is no longer available and generally loans much harder to come by. So how smart are those folk who ignored the advice to buy on the fools hope of a price crash? Yes they might be able to afford to buy but sadly for them they are now outside what will be a market that accelerates away from their ablity to buy.
It is the realisation by some that they should buy while they can that will gently ease the market beyond the reach of those that wait too long.
As predicted 2 years ago BTL has not crashed and it is a proven fact that BTL landlords are continuing to remove stock from the starter homes market. Even new homes developers have change tack and are now keeping the homes built back as Build to let.
Carry on ignoring the signs you very smart people, your crash hasn't happened and the grown up world has adapted to a new economic way of doing things.
They are guessing, simple as that.
With all that is going on in the wider economy no-one can accurately predict what will happen in 3 years time.
If so, then somene would have predicted the gigantic mess that the economy is in now.
I do think that stories like this should not be given headlines because it only fuels the public's perception that we in the property business don't know what we're talking about.
But real world property values will continue to decline.
That is of course assuming that Spain doesn't go POP!
The news that the Spanish Government just did an RBS to Bancia and still have not got to grips with the consequences and results of their property building boom is VERY bad news for Europe as a whole and like it or not, Britain is part of Europe.
I love the idea of optimism, but stupid, unrealistic optimism just makes my blood boil.
Don't try and talk the market up, just don't talk it down.
Sleeping dogs lie, keep your sharp stick to yourself.
AGENTS PIPELINES HIT"
"ONE THIRD OF BUYERS CUT ASKING PRICES"
"HOUSE PRICES SET TO RISE NEXT YEAR"
These are the first 3 headlines in the ea today this morning.
SPOT THE ODD ONE OUT ???
Really.....this goes to prove beyond doubt that industry commentators don't know what they are talking about.
...House prices set to rise again from next year...
Interest rate rises to follow then?
If any one from CBRE is reading this, I'd love to know where they think the money to fund rises in house prices is going to come from?
125% mortgages, liar loans and interest only deals have been sent packing, the BOMAD's in need of a bailout, folk who aren't CEOs haven't had a pay rise in yonks and British Gas is today saying the cost of fuel is going up.