Residential property prices, much like the economy, are likely to grow faster than initially anticipated next year thanks to the greater political certainty unlocked by the Conservative Party’s decisive election victory last week, according to Rightmove.
The property website forecasts that average asking prices will increase by 2% in 2020, up from the existing annual rate of 0.8%, thanks to low-interest rates, high employment, rising wages, greater political clarity, and a widening supply-demand imbalance.
Rightmove’s December House Price Index notes that the number of sales agreed so far in 2019 is 3% lower than a year earlier, but the number of properties coming to market has dropped far more significantly by 8%, with estate agents’ stock levels at a two-year low.
Property price growth is expected to be led by northern areas, with Rightmove expecting to see an increase of between 2% and 4%.
In the south, which is generally more expensive, a more modest 1% growth rate is anticipated.
Miles Shipside, Rightmove director and housing market analyst, commented: “Home-mover confidence and activity have been dogged by political uncertainty since the 2016 referendum.
“With a clear majority in the election, there is now an opportunity to release some of the pent-up demand in the spring, and for some modest upwards price movement.
“Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution.”