A forecast for the housing market has been release by Hamptons. It predicts that the next year and beyond, property price growth will remain above pre-pandemic levels as the cycle ends in 2024.
The company believes that summer 2021 marked the peak of house price growth. As we head into the Autumn and Winter months, they anticipate that the price growth to slow, ending the year at 4.5% across Great Britain.
The forecast says that a second wave of lockdown-induced demand will keep price growth in positive territory at 3.5% in 2022, 3% in 2023 and 2.5% in 2024.
More specifically, London is set to underperform the rest of the country until the house price cycle ends in 2024. They predict that prices in London will end the year up 1.5%, and then 2022 will see a 1.0% rise, and continue rising by 1.5% in 2023, before accelerating to 3% in 2024.
The top performer over the next 4 years is expected to be the North East. Hamptons have confidence in house prices rising by 21.5% in Q4 2024, which would outpace the Great Britain average of 13.5%.
Alongside this, the property firm forecasts that there will be 1.5 million completions in Great Britain in 2021.
The pandemic has induced changes which means that household are making more moves than before the pandemic. It is forecasted that transactions will fall slightly to 1.25 million in 2022, before reaching a new normal of 1.3 million in 2023 and 2024.
Aneisha Beveridge, head of Research at Hamptons, said: “The housing market has confounded expectations and forecasts in past months. Back in the autumn of 2020, such were the economic challenges being faced that we could not have envisaged the extraordinary demand for relocation which we have seen this year. But there has been a huge attitudinal change towards property, which cannot be attributed to the stamp duty holiday alone.
“People now place a higher value on their homes, having have spent more time in them than ever before. Flexible and remote working, which look set to continue, have encouraged households to make bigger moves. As a result, more homes are likely to have been sold in 2021 than in any year since 2007. This is why we also think housing activity will surpass pre-pandemic times in 2022 and beyond.
“The pandemic has accelerated the closing of the house price gap between London and the rest of the country. Even so, we still expect London to underperform the rest of the country until 2024, when the cycle is likely to end. While we will see a degree of levelling up over the next few years, the gap between house prices in the capital and the other regions is likely to be wider than that seen at the end of the previous cycle in 2007. And this divergence will set the pattern for future performance.”
To read the forecast: https://propertyindustryeye.com/uk-house-prices-forecast-to-rise-by-up-to-3-5-a-year-between-2022-and-2024/