Savills Updates Price Forecast After Budget Boost | New
Savills became the first forecaster to officially raise his house price growth projections following last week’s budget. The estate agent said he was raising his forecast from 0% this year to 4%, with the fastest growing outside London.
The forecast follows the unexpected performance of the market last year, with prices rising 7.3% following the coronavirus shutdown in the spring.
They arrive the week after Chancellor Rishi Sunak (pictured) extended the stamp duty holiday on properties under £ 500,000 imported last July until the end of June this year, with properties under £ 250,000 exempt until September. The Chancellor also said the government would support mortgages at 95% of the loan value by providing government guarantees on the loans.
Sunak has been criticized in some quarters for unnecessarily fueling demand in an already overheated housing market, thereby pushing up prices. The Office for Budgetary Responsibility said the measures would likely result in a “small” price hike.
Savills said prices would rise only 2.5% in London this year, reaching 5% in the south-east, south-west and east of England.
Prices will rise 4.5% in the North West, Yorkshire and the Humber, and the East and West Midlands. Scotland, Wales and the North East are all expected to see increases of between 3% and 3.5%, Savills said.
Prices across the UK will increase by a fifth by 2025, Savills said, with growth highest in the North West and lowest in Yorkshire and the Humber.
The company said the search for space and “lifestyle offshoring” would lead to strong demand in the lifestyle and country house markets, as well as a resurgence of prime central London properties. .
Lucian Cook, head of residential research at Savills, said 2021 was going to be a “complex and uneven year” but the decision to extend the stamp duty holiday and introduce mortgage guarantees “significantly reduced the risks lower “prices.
He said: “The outlook has improved since the start of the year given the speed of the vaccination program, the expected easing of social distancing measures and the government’s support for both employment and employment. to the housing market.
By extending both the stamp duty holiday and the holiday scheme in last week’s budget, the Chancellor significantly reduced downside risks mid-year, while a recovering economy is expected to support price growth towards the end of the year. “