House prices are predicted to increase by 2% in 2020 as the new majority Government offers potential movers a new ‘window of certainty’.
That’s according to property website, Rightmove, which revealed house prices across the UK had dipped in December by 0.9% – the smallest reduction at this time of year since 2006.
Its house price index revealed demand had been outstripping supply in 2019 with the number of properties coming onto the market down by 8% compared to 2018. Meanwhile sales agreed during 2019 had also fallen by 3%.
Yet forecasts by the website, which measures the prices of 95% of the properties coming to market, suggest the general election result could encourage a flurry of activity amongst movers in the Spring.
And this, analysts said, could drive some modest upwards price movement to the market.
Miles Shipside, director and housing market analyst said: “The greater certainty afforded by a majority Government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand.
“Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution.”
Regional differences
The prediction from Rightmove is that prices will increase by 2% at the end of 2020, which would be twice the current annual rate of 0.8%.
This is a UK-wide price rise, and Rightmove emphasised there would be regional variations with London experiencing more modest rises of 1% and the northern regions seeing more dramatic rises of between 2% and 4%.
Shipside also said, with the removal of political uncertainty, the owners who had been reluctant to sell would start putting their properties on the market.
Other factors which influence prices – such as interest rates remaining low, competitive mortgage prices and high employment, not to mention average wage growth outstripping house price growth – would also prove helpful, Rightmove said.
Other predictions
Rightmove was not the only organisation predicting growth in 2020 following the general election result. Tomer Aboody, director of property lender MT Finance, said the next 12 to 18 months would see ‘positivity filter back into the market’.
He predicted property prices would increase across the country with London experiencing the greatest gains.
But Jeremy Leaf, a north London estate agent and former Royal Institution of Chartered Surveyors chairman, said any post-election bounce would only happen if there was an early clarification on the Brexit timetable.
“It would be surprising if there is a significant increase in values over the next few months,” he added.
“Prices have been underpinned for some time by a shortage of supply, so any rise is likely to be more than outweighed by the usual increase in stock covering most price ranges at this time of year.”
