UK house prices to keep rising in face of Brexit

Economics group says trend to remain upward despite EU uncertainty

The price of a home will still be around £40,000 more in five years’ time despite the “tremors” caused by the Brexit vote, according to projections.

The Centre for Economics and Business Research (CEBR) said that while property values are expected to show weaker growth for the rest of 2016 and into 2017, the general direction of prices is still expected to be up.

The increases mean the average UK house price could rise from £194,000 in 2016 to £234,000 in 2021 – a £40,000 increase.

The economic forecaster said despite “post-Brexit tremors”, house prices are to increase by 5.7% over 2016 as a whole.

This year annual house price growth was running as high as 8%, but CEBR expects to see a slowdown in house price growth over the second half of this year.

This slower growth will be caused by a three percentage point stamp duty hike that came into force for buy-to-let investors on April 1, combined with the general economic uncertainty following the referendum vote to leave the EU.

Next year UK property values are forecast to increase at a slower pace of 2.2%, although in London house prices are expected to fall by 5.6% in 2017.

Many housing market reports have pointed to a lack of available properties helping to keep house prices up. CEBR said it expects the impact of Brexit on the housing market to be smaller as Brexit negotiations progress.

It said: “In the medium term we expect house price growth to pick up as exit negotiations with the EU progress and investors and households gain clarity on how post-Brexit UK will look.”

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