Experts are predicting a tough year ahead for the property market, with UK prices rising just 2% and inner London asking prices falling 5%.
The property listings website Rightmove forecasts UK-wide prices to rise for the seventh consecutive year. However, uncertainty following Brexit is set to weigh down in certain local markets, such as central London where the price bubble could start to deflate.
These predictions follow Rightmove’s recent report that average asking prices for newly-listed homes dipped by 2.1%, or £6,511, in December. The average asking price in the UK is now £299,159 – although this is still 3.4% higher than it was in December 2015.
Miles Shipside, Rightmove housing market analyst, said: “For the housing market the uncertain outlook has meant a head and heart tug of war between stay put and carry on moving.
“The sword of Brexit uncertainty hangs over the market, an unknown factor that may – or may not – have damaging consequences for the economy and confidence. There was a bout of jitters with the unexpected referendum result, albeit now seemingly short-lived, but more may arrive after Article 50 is invoked.
“For the time being any nervousness is being over-ridden by high demand for the short supply of suitable homes for sale in the lower and middle market in many parts of the country.”
Many homeowners are still reluctant to consider moving house, which is propping up house prices due to the lack of homes for sale.
Overall, the number of property sales agreed has risen by 5.2% in the last two months, although new listings are only up 2%.
Average house prices are forecast to hold up in the UK, although a gap is set to emerge in the capital, between Central and Greater London house prices.
Property in the prime market of inner London, in boroughs such as Westminster, have already been weakened following the Brexit vote in June. With house prices expected to fall as much as 5% in the next year, properties are set to lose tens of thousands off their value.
Prices in Greater London are expected to rise by 3% over the next year, despite less properties being listed on the property market.
Despite ongoing uncertainty up to triggering Article 50, people continue to remain keen to get on with their home-moving plans.
With historically low interest rates, many people are expected to take the opportunity to fix their mortgage at a very low rate.
With less property entering the market, prices are set to remain strong into the new year and throughout the rocky uncertainty following Article 50.
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