THE housing market should start 2020 with a new mood of confidence – but continued political uncertainties will keep a lid on property prices, economists predict.
Several predictions for house price growth across 2020 are clustered around the two per cent mark.
Experts said the Conservatives’ recent general election win could help to bring more certainty to the market and unleash some pent-up buyer demand.
An abundance of low-rate and low-deposit mortgage deals should also support activity.
Some estate agents are even sensing there may be a “Boris bounce” for the housing market, which could in the coming months have an effect on house prices.
However, Brexit concerns could also pick up as 2020 progresses, making people behave more cautiously, and affordability constraints will also cap price growth in some parts of the UK.
Howard Archer, chief economic adviser at EY Item Club, said: “There will still be appreciable uncertainties, including on the Brexit front – so that the upside for house prices in 2020 is likely to be limited.”
Rightmove also predicts that the price of property coming to market will increase by 2% in 2020.
It said there is now an opportunity to release some pent-up buyer demand that had been building before the general election.
House sellers’ pricing power will be boosted by a lack of other options for potential buyers, Rightmove suggests.
The Royal Institution of Chartered Surveyors (Rics) has also pencilled in house growth of two per cent for 2020 – but it believes rents will increase at a faster rate of 2.5 per cent as the rental sector struggles with a lack of housing supply.
Russell Galley, managing director, Halifax, said housing market prospects for 2020 look “a bit brighter” than in 2019.
He continued: “However the shortage of homes for sale and low levels of house-building will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.
Separate consumer research from Lloyds Bank found 43 per cent of people think the biggest challenge for first-time buyers in 2020 will be raising a deposit, while 27 per cent think it will be high property prices.
A quarter think the biggest challenge for existing home owners looking to move will also be expensive property prices, while 23 per cent cited high moving costs.
By Martyn Smith
Source: Hereford Times