House prices to grow 13% by 2023 despite Brexit

One of Britain’s foremost property consultancies has given a relatively upbeat prediction for the UK housing market over the next five years.

CBRE is forecasting 1.8 per cent growth in average house prices this year - modest, but more optimistic than forecasts from some other property experts - with 2019 transactions volumes restricted because of growing caution amongst lenders and a muted buy to let market.

And the consultancy says compound price growth by the end of 2023 will be 13.1 per cent.

Even so it warns that while Help to Buy currently underpin the new build market, that may change after 2021 when only first time buyers will be eligible.

In addition, CBRE cautions that affordability and mortgage regulation will constrain price growth. “House prices are approaching the limit that current incomes and credit conditions can support, and the ability for buyers to bid up prices is limited” it says.

For the lettings market it says rents will increase 11.4 per cent by the end of 2023 “and demand for rental homes will increase once more after a two year period of weakening tenant enquiries, particularly from lower-earning younger people.”

It says the brightest element of the private rental landscape is the burgeoning Build To Rent niche, which has attracted £2.1 billion of investment in year to the end of the third quarter of 2018.

This is some 51% higher than the same period of 2017. “Investment is on a firm upwards trajectory, and investment volumes in 2019 seem likely to exceed 2018's total” says CBRE.