20 April 2017
Reporter: Theo Andrew

UK property prices on the up

UK house prices will rise by 10.1 percent to reach an average of just under £227,000 over the next four years, according to a BNP Paribas Real Estate forecast.

On average, prices are expected to rise by 2.2 percent to £210,400 in 2017, with all areas of the country experiencing positive growth, apart from the North East.

London prices are expected to return to growth in 2017, rising by an average of 1.3 percent to £479,102. The capital’s average house price is expected to increase by 6.8 percent in the next four years, reaching £505,297.

Sales activity in London has picked up in the last couple of months after a year of negative or flat growth, according to Steven Cooper, joint head of residential consulting at BNP Paribas Real Estate.

Cooper said: “While prices in prime central London have come under pressure, demand for mainstream market schemes remains relatively buoyant due to pent up housing demand.”

Other regions expected to perform strongly over the next four years are the South West, with a predicted increase of 22.2 percent; the East Midlands, expected to increase by 13.6 percent; and the West Midlands, predicted to increase by 13.1 percent.

Simon Durkin, UK head of research at BNP Paribas Real Estate, said: “Our forecasts indicate a reversal in the recent rises in real incomes and a slight weakening in the business backdrop. Broadly this will result in house price growth of around half that seen last year.”

“At a practical level, the story will become less about regional trends, with growth and activity focused on micro markets with a strong business and consumer economy.”

“For example the North East features an extremely wide range of growth at a city level, with Newcastle Upon Tyne performing significantly more strongly than the regional average and likely to experience a less dramatic down cycle.”

He added: “By contrast, those areas more vulnerable to the slowing economy and weakening pound will likely experience markedly lower levels of growth.”

According to Nationwide, the average house price in the UK rose by 4.5 percent in 2016, a better-than-expected performance of the UK economy.

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