Savills forecasts massive growth in UK housing market by 2029

In the UK, estate agent Savills has projected a significant 23.4 percent growth in the housing market over the next five years, anticipated to last until 2029. Properties in the northern regions, where prices are currently more affordable, are expected to experience the highest increases, particularly in the northwest, where prices could rise by 29.4 percent. The northeast follows closely with an expected increase of 28.2 percent. Conversely, London and the southeast are likely to see the smallest growth rates due to already high price levels. This upward trend in prices comes amid a decrease in inflation rates, which have returned to below the 2 percent target, improving buyer confidence. The Bank of England's recent cut to the base rate has also prompted lenders to offer more competitive mortgage deals, creating an environment conducive for buyers who previously faced higher interest rates. Lucian Cook of Savills highlights that the fundamentals of demand, supply, and affordability have become crucial in shaping the dynamics of the housing market. However, challenges persist in the market. The first-time buyer segment remains stagnant due to insufficient government support, and the buy-to-let sector faces dampened demand stemming from increased regulatory pressures and additional stamp duty charges. The recent announcement of a 2 percent surcharge on stamp duty for second homeowners has led some potential landlords to withdraw from property investment, further complicating the market landscape. The overall sentiment suggests cautious optimism as the market adjusts to these new conditions; yet, the implications of rising prices and regulatory changes may lead to a cautious approach from buyers and investors alike.