Average UK house price growth will reach 2.2% in 2017, a rise of £4,460 that will see the average home worth £210,400 at the end of the year, according to new research.
The findings, compiled by BNP Paribas RE, show that London house prices are forecast to return to growth in 2017, rising by 1.3% in 2017 and reversing a decline in prices reported by the RICS over the 12 months to February.
BNP Paribas RE further found prices would rise by 6.8% over the next four years, to just over £505,000 by 2021.
The research also highlighted a strong performance in several regions, with the South West (22.2%), the East Midlands (13.6%) and West Midlands (13.1%) forecast to perform well over the next four years, driven by robust service sector output in core cities. Meanwhile, housing affordability pressures will persist in the South East commuter belt, with prices forecast to rise by an average of 17.3%.
John Slade, BNP Paribas RE UK CEO, said: “The big debate in London is the extent of the impact on the £1,000 to £1,500 psf market. While we have seen some adjustment, people now realise that high stamp duty may be here to stay and pricing has adjusted accordingly. While 2017 may be a year of relative stagnation this market should return to stronger growth thereafter.”
The average house price rose by 4.5% in 2016 according to Nationwide, reflecting the better-than-expected performance of the UK economy following the Brexit vote.
Steven Cooper, joint head of residential consulting at BNP Paribas RE, added that while prices in prime central London have come under pressure, “demand for mainstream market schemes remains relatively buoyant due to pent up housing demand” in other areas of the capital.
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