Sign up to our Editors Choice newsletter now! Click here

UK house prices will not reach 2007 peak until 2019

Accessibility Menu

Menu Search

24dash - The UK's most up-to-date social housing and public sector news website

UK house prices will not reach 2007 peak until 2019

24DASH.COM Logo

Published by Max Salsbury for 24dash.com in Housing and also in Finance

UK house prices will not reach 2007 peak until 2019 UK house prices will not reach 2007 peak until 2019

Knight Frank has predicted that UK house prices will not reach their 2007 peak until 2019, creating the longest housing market recovery on record.

The estate agent also predicts that housing transactions will rise by 2% in 2013, but will remain well below peak levels until 2020.

Gráinne Gilmore, Head of Frank Knight's UK Residential Research, said: “Some five years after the start of the financial crisis, the housing sector in the UK still does not bear the hallmarks of a fully functioning market.

“Transaction levels have roughly halved since the last market peak in 2007, and are 35% below the 20 year average, as first-time buyers and those further up the housing ladder struggle with tighter mortgage lending rules."

Knight Frank further predicts that tax changes will weigh on prime central London prices, with no price movement expected next year.

Liam Bailey, global Head of Residential Research, said: “Prime property prices in central London have bucked the trend of the wider housing market in the UK over the past few years, bouncing back 50% after the post-crisis trough to reach a new high. Last year we forecast another year of growth, which we have seen, although the level of growth exceeded our expectations for a 5% rise in values in 2012.

“The demand for luxury London homes from overseas buyers looking for a safe-haven for their money, as well as a slice of London life has helped drive price increases. The weakness of the pound makes the investment even more attractive, particularly for those buyers who have currencies pegged to the US dollar. This growth might have continued into next year, albeit on a more modest basis as prices bumped a ‘natural ceiling’, but government policy is set to have an impact on the market next year."

Comments

Login and comment using one of your accounts...