Savills’ new research, which the real estate company will present at the RESI conference in Newport today, predicts that house prices will grow by 18.1 per cent over the period.
Lucian Cook, director of residential research at Savills, is expected to say: ‘As buyer sentiment improves in line with the economy, house prices in the south east are set to rise by 25 per cent over the next five years.’
‘Even across the north east and Yorkshire & Humberside – the worst performing regions – we could expect 13 per cent capital value growth, underpinning continued strong performance in housing,’ he will add.
Savills’ research also shows that housing transaction levels are 46 per cent below those seen before the financial crisis.
‘For those looking to get on or move up the housing ladder, an increase in transaction levels is more relevant and arguably much more important [than house price growth],’ Mr Cook will say.
Savills’ research shows the government’s equity loans and mortgage guarantee programs, such as newbuy and help to buy, will partially unlock the mortgage market.
However, it adds that annual growth in house prices could slow to just 1 per cent by 2017, as these stimuli are withdrawn and interest rates rise, constraining affordability.