Reuters has released its housing market forecasts for 2017, highlighting opinions from leading property experts.
Online estate agent eMoov.co.uk joined Nationwide, Knight Frank, Allianz Global Investors and many more across the industry to contribute to the report. The poll covers subjects from national and London house price growth, the cost of UK property, the impact of Brexit and the consequences of the recent Autumn Statement.
The questions and results, including comment from the CEO of eMoov, Russell Quirk, can be found below:
Forecasts for full year change in UK house prices
The median prediction for UK house price growth for this year was 4.7%, with most experts believing this would slow to 2% in 2017.
“I think 4.7% is about right in terms of where the market will finish in 2016. I think the outlook for 2017 is far more optimistic than a 2% increase. The market is in good condition heading into the New Year, and prices could grow by as much as 4% next year.”
Forecasts for full year change in London house prices
Predictions for the London market in 2016 weren’t much brighter, with the median growth forecast at 5% for this year, dropping to a decline of 0.5% in 2017, but recovering by 2% the following year.
“The outlook for London, on the other hand, isn’t as rosy, and a melting pot of detrimental events during 2016 could see London prices fall by as much as 4% in 2017.”
Property Experts Reveal Their Housing Market Forecasts for 2017
What best describes the level of UK house prices?
Each property expert was then asked on a scale of one to ten how the current market is priced. The median score was five – priced right.
“For all its negatives, I think the majority of the UK market is currently priced fairly, but London is probably too inflated, despite the additional factors that make it one of the most desirable markets in the world.”
What best describes the level of London house prices?
With London house prices in a league of their own, it’s no surprise that the answer leant more towards ten (extremely expensive), with a median score of eight.
How are the risks to your house price forecast skewed?
Quirk was the only property expert included in the poll to believe the future of the housing market looks positive for homeowners, with others predicting a more pessimistic view.
“Low money costs and low housing supply necessitate that, in the medium to long-term, demand tension wins in pushing prices up in general – great for homeowners and the general market, not so great if you are a struggling would-be buyer.”
How has your opinion changed of the future of the UK housing market since the vote to leave the EU?
Of the experts asked, no one believed their opinion of the market had changed for the better. 40% said there was no change, with the majority believing the future of the market had got worse.
“No surprise that many believe the EU vote to have been detrimental, whether that be due to scaremongering across the industry or because it suits personal agendas. Structurally, nothing has changed, and so I believe there has been little change to the market and this will continue for the time being.”
How about the future of the London market?
70% of those asked also believed the future of the London market was worse off as a result of leaving the EU.
“I do believe the London market is a lot softer now, but the Brexit vote has only had a minor contributing factor to this. The real killer blows of 2016 where London is concerned have been the changes to Stamp Duty for second homes, and the overheating of prices from prior years giving London buyers house price heat stroke.”
What kind of impact will the measures announced in the Autumn Statement have on the UK housing market?
Finally, the experts were asked what impact the measures announced in the Autumn Statement would have on the market. The empty promises that the Government pledges regarding housebuilding seem to have been recognised across the industry, with 60% believing there will be no impact, and the rest saying there would only be minimal impact.
“As is always the case, there will be very little impact, if any, as a result of the Autumn Statement. The 40,000 homes pledged are affordable and so will not impact the general market. Despite the rhetoric, the Government will fail to build the 100,000 additional homes needed, which, if they did, would, in turn, necessitate a balancing of supply versus demand and lower price appreciation.”
Do you agree with the experts’ housing market forecasts for next year?