The past year was heavily affected by constant political turmoil and Brexit ambiguity, resulting in a lack of sufficient house price growth throughout the whole of 2019.
However, before the year ended Britain gained a Conservative majority in the general election finally resulting in widespread support for Prime Minister Boris Johnson´s Brexit deal. This increase in certitude could pave the way for a successful and prosperous new year.
According to Rightmove, average house prices will increase by 2 per cent during 2020. Knight Frank believes in the same amount of growth, whereas Zoopla estimates a higher rise of 3 per cent.
The London market has struggled over the last three years, however, 2020 is already showing signs of improvement. Currently, the capital city´s house price to earnings ratio is still much higher than other cities such as Edinburgh and Manchester.
London’s property market is set to have its best year since the EU referendum of 2016, thanks to the relative increase in political stability and progress on Brexit, giving buyers and sellers increased confidence, says the Evening Standard’s Homes and Property.
“London is finally showing tentative signs of bottoming out, and we expect a more modest price rise of +1% in all of the southern regions where buyer affordability remains most stretched,” says Rightmove’s Shipside.
Chestertons, an estate agent dealing with upmarket locations in London, said a bounceback in the capital could happen quickly.
House prices in the north of England and the Midland are expected to flourish in the new year as many companies gradually decide to move their business to other areas outside the capital.
Other countries have also experienced rapid house price inflation similar to the UK following an increase in mortgage lending; although, Britain has seen prices rise faster than in any other advanced industrialised nation.
Real, inflation-adjusted house prices are 3.5 times higher on average in the UK than they were in 1980, whereas during the same period of time Germany and Japan have barely changed and in France they have doubled.