Hamptons International say that housing market activity will enjoy double digit growth in the next three years, with transactions back above 1m by 2016.
Prior to the financial recession transactions were running at 1.2m per year.
The forecast focuses on transaction data rather than house prices, as Fionnuala Early, research director at Hamptons, says these are a “far superior indicator” of housing market health. ”A liquid and active market is the key to avoiding volatility and to ensuring a stable and sustainable housing market in the UK,” she added. Transactions will be 50 per cent higher than they are today in 2018 say Hamptons, assuming no other seismic economic events push the recovery off course.
House prices are forecast to rise by six per cent in 2014 and by almost a quarter over the next five years. The report says that the capital will continue to move out ahead of the rest, with prices in central London set to increase by a shade under a third over a five year period. Surprisingly though house prices in prime central London are anticipated to slow their growth, going up by just three per cent in 2014. However over the next five years they are still expected to go up by 20 per cent. “In the prime central London market we expect demand to soften as investors search for better yielding assets elsewhere,” Earley continued.
“House prices in London and the South of England will continue to outperform the average for England and Wales, while Northern parts of the country will see a more subdued revival.” “Market dynamics which shift buyers from higher to lower priced areas will boost prices in the central London market and also the South as families migrate out of the capital.
“ The forecast from Hamptons is the first of many from across the industry, which will appear between now and January.