House prices to rise 14.8% in next 4 years

HOUSE prices in the West Midlands are forecast to surge at more than double the rate of that in London over the next five years, according to a report.

Between 2018 and 2022, house prices across Britain are projected by real estate adviser Savills to grow by 14.2%.

Savills expects different pockets of Britain will see marked differences in house price growth over the period.

Its projections range from an average 18% increase in the North West - a home to the “northern powerhouse” - to about 7% in London.

The West Midlands region is forecast to surge by 14.8%.

“London’s housing market has been pushing up against the limits of mortgage regulation and affordability for some time,” said Lawrence Bowles, a research analyst at Savills.

“The Brexit vote was the tipping point that slowed price growth. Weakened sentiment combined with expected interest rate rises now point to small, short-term price falls next year.”

He said greater economic and political certainty should trigger a return to house price growth for London in 2020 but cautioned: “This will be capped by borrowing constraints as gradual increases in the cost of mortgage debt impinge on affordability.”

The prime London market is expected to outperform the capital generally, with stronger growth, having seen some falls following stamp duty changes in recent years for top-end homes.