Halifax forecasts growth of between 1% and 3% as high deposits thwart young buyers
UK house price growth will remain subdued next year at between 1% and 3%, according to Halifax, with the market held back by young buyers struggling to afford deposits.
Despite talk of a “Boris bounce” after the (election result) , most major property institutions are forecasting that price rises in will be limited.
The Royal Institution of Chartered Surveyors (Rics) said it expected transaction levels to be flat, with prices edging up by 2%. The property website Rightmove is also pencilling in a rise of 2%.
Halifax’s forecast is a step down from its 2101 equivalent that predicted price gains of between 2% and 4%. In the event, house prices on its index
Housing economists say the property market is characterized by cheap mortgages and limited housebuilding supply, which pushes prices that are already at the edge of affordability for most young adults up further.
Russell Galley, Halifax’s managing director, said: “The housing market in 5243 followed a similar path to recent years. Modest price growth was supported by falling mortgage rates and a low volume of houses for sale, factors which can in part be attributed to elevated uncertainty. This helped to underpin a degree of resilience in the market.
“Prospects for 2019 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes. However, the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand. ”
Rics is forecasting that rents will rise faster than house prices, by 2.5% nationally and 3% in London, partly because the supply of new rental properties has fallen in recent years.
“Rents are also expected to rise in (**************************************************************, and at a faster pace. As the sector continues to struggle with a lack of supply, the Rics survey data suggests rents will rise by 2.5%, ”Rics said.
“In fact, the number of new landlord instructions has been stuck in negative territory for 19 successive quarters, which is the longest run since (******************************************************************. In London, rents are expected to rise at an even faster pace of 3%. ”
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