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House prices set to rise by up to 4% in 2020

POSTED ON 17 DECEMBER 2019

The results of the election have prompted Rightmove to predict that house prices will rise by up to 4% in 2020.

The prediction is welcome news for the property market and those looking to sell next year, especially after the market had been hit with political uncertainty since the 2016 referendum.

With such a clear majority gained in the election, Rightmove says that there will now be more opportunities to release some of the pent-up demand in the spring.

“The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand,” explains Miles Shipside, Rightmove director and housing market analyst.

“Rightmove measures the prices of 95% of property coming to market, and we predict that buyers and sellers will on average see a 2% rise in those prices by the end of 2020.

“While this is over twice the current annual rate of 0.8%, it’s still a relatively marginal increase as it’s a price-sensitive market.

“There will be regional variations. London is finally showing tentative signs of bottoming out, and we expect a more modest price rise of +1% in all of the southern regions where buyer affordability remains most stretched. In contrast, the largest increases will be in the more northerly regions, repeating the pattern of 2019 with increases in the range of 2% to 4%.”

Rightmove says that 2019’s annual rise in price is slightly above their forecasted figure of 0% – ending the year at 0.8%, which they say is due to demand outstripping supply.

“With much of the political uncertainty removed, we expect that the number of properties for sale will recover as more new sellers come to market, making up some of this year’s lost ground,” says Shipside. “However, property supply is still limited, with estate agents having the lowest proportion of properties available for sale in two years, and this will fuel modest gains in the national average asking price of property coming to market.

“The fundamentals remain sound with low-interest rates, lenders competing to lend, high employment, and average wage growth outstripping house price growth and helping buyer affordability. The statistics for 2019 encouragingly show that the ‘have-to’ and ‘life-stage’ markets have been carrying on, and we hope that the more certain outlook would encourage many would-be discretionary movers to finally get off the fence.”

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