Dataloft expects that UK house prices will rise in 2018 but only by a narrow margin – an average of around 1.8%, ranging from small falls in some markets – notably London, to a 5% uplift in others.
As ever, there will be significant variations at local level – these are, after all, forecasts of the national average. Local markets can outperform for a plethora of reasons, including: new train services, new employers, new visitor attractions and new housing completions. The national outlook is mostly driven by availability of mortgage finance and economic confidence – if either are low, demand subsides.
An escalation in our forecast rates of growth could be triggered by successes in the Brexit negotiations and if economic indicators return to their pre-Brexit trajectories. Downside risks include significant job losses, rising inflation and rising interest rates – all of which will put a squeeze on affordability.
The outlook for UK house prices for the next few years is likely to be a period of continued and prolonged period of low levels of house price growth. Unlikely, however, that we will see price drops across the board although this may happen in some markets.