Strutt & Parker looks at the residential property market in 2018.
The residential property market in 2017 was characterised by a striking difference in house price growth between the UK and London. According to Nationwide, UK house prices grew 2.5% in 2017. In contrast, Prime Central London (PCL) prices fell around 3%. The national picture was driven by strong growth outside London, with the East Midlands, South West and West Midlands all experiencing over 4.5% growth.
2018 looks set to continue the trend of steady, albeit unspectacular UK house price growth of around 2.5%, while prices are forecast to be flat in PCL, with a downside risk of 5%.
Stephanie Mcmahon, Head of Research at Strutt & Parker said, “The five-year forecasts remain difficult to predict, as so much rests on the outcome of Brexit negotiations and the attractiveness of the UK as a place to live, study, work, do business and invest in.
Traditionally the most buoyant housing market in the UK, London experienced a slowdown following the EU Referendum, and this may continue until 2020. Regional hotspots are likely to be the drivers of UK house price growth in the meantime, with 18% growth forecast for the UK over 5 years to 2022.
Necessity breeds invention, and in a slower market more innovative housing solutions may come to the fore. This would include more offsite construction and modular buildings to speed up delivery, and maximising living space through increased density on a plot of land. This can be viewed in tandem with residential trends which are supported by innovative design and ethos, including Micro Mansions and Yoyo homes, which allow for changing living patterns through flexible internal spaces.”
Delivery of new housing in the UK was given a boost in the Budget in November 2017, and the Government reiterated its commitment to the Cambridge-milton Keynes-oxford growth corridor. The East West rail link and Oxford Cambridge Expressway will reconnect the two historic university cities and help support the delivery of one million new homes by 2050.
Paul Sutton from Strutt & Parker’s Development & Planning team commented: “House prices in both Cambridge and Oxford have been driven by high demand and low supply, built around the popularity of our world class universities. More high-tech industry will need a lot more housing, and increasing supply in the bordering commuter towns and villages works towards the greater goal of delivering ‘England’s Silicon Valley’.”