New analysis from Knight Frank has suggested that UK house price growth will fall to 1.0% in 2018, following a familiar pattern we have seen since the summer of 2014.
However, it’s not all bad news as the estate agency believes that house prices will still reach 14.2% cumulatively between 2018 and 2022.
In London, prices are forecast to fall by 0.5% in 2018, but cumulative price growth over the next five years is positive at 13.1%.
Knight Frank says prices will remain muted overall next year amid increased economic and political uncertainty in the run-up to Brexit and amid more muted forecasts for wage growth.
But it foresees slightly stronger growth in the Midlands, East of England and the North West, a continuation of the trend that has emerged this year.
Knight Frank said: “Once the Brexit deal is completed, we forecast rising momentum across the market, with price growth reflecting this in many locations. The variations currently observed in the prime housing markets in London and beyond are set to continue, and we explore this more fully in our blog. The UK may now be entering a period of interest rate rises, but even so, we expect rates to be low compared to long-term norms by the end of the forecast period.
While development levels are rising across the country, the shortage of new homes is unlikely to be fully reversed in the coming years, and that will underpin pricing. On the other hand, factors such as deepening affordability pressures and property taxes, will continue to weigh on pricing.”