Expert predictions for the property market in 2020
House prices continued to rise in 2019, but at a slower rate than in previous years. Many experts put this down to the political and economic uncertainty we experienced up until the end of 2019. However, much of that uncertainty has been removed as we enter the new decade, with the Conservative victory in December’s general election confirming that the process for for leaving the EU will commence at the end of January 2020.
As such, homeowners and those looking to purchase will likely feel more confident in their property-related decisions as we enter 2020.
With that in mind, here is what some of the key players within the mortgage industry expect from the property market over the next twelve months.
Rightmove property asking prices Dec 2019 – Jan 2020.1
As the UK’s most popular property portal, Rightmove’s latest results (above) provide some insight into the following prediction for the property market in 2020:
“Rightmove measures the prices of 95% of property coming to market, and while our prediction of a 2% price rise in 2020 is more than twice the current annual rate of 0.8%, it’s still a relatively marginal increase as it’s a price-sensitive market.”2
The Royal Institute of Chartered Surveyors (RICS)
The general election has shown an uplift in sentiment according to RICS. Simon Rubinsohn, RICS Chief Economist, had the following to say:
“The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome. Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal. However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.”3
Halifax, which is part of Lloyd’s Banking group, and one of the largest UK mortgage lenders, expects the following over the next 12 months:
“Prospects for 2020 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes. However, the shortage of homes for sale and low levels of housebuilding will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.
As a result, our forecast for house price growth in 2020 is in the range of 1% to 3%, consistent with the pattern of weaker growth seen since 2017.”4
Global property group, Knight Frank, made the following comment on what lies ahead for the property market:
“The risk of a no-deal has not completely disappeared. December 2020 marks the end of the transition period, potentially raising the spectre of a no-deal in the second half of 2020.
Elsewhere, interest rates are also likely to begin a gradual process of normalisation in 2020, which could mark the end of a period of ultra-low mortgage rates and squeeze affordability for some purchasers. Even so, we expect rates to be low compared to long-term norms by the end of the forecast period, with economists expecting interest rates of below 2% by 2023.
We have examined this, as well as other factors with the potential to impact the market in more detail. Overall, we are forecasting price growth of 2% across the UK in 2020 and of 15% cumulatively between 2020 and 2024.”5
Nicky Burridge from the property search website Zoopla had the following to say:
“The outcome of the General Election has removed some of the uncertainty in the property market and is expected to lead to a boost in sales levels as pent-up demand works through the system.
But other issues still remain, with affordability continuing to be stretched in some cities, which is likely to act as a dampener on activity in the year ahead.
As a result, we are forecasting average house price growth of 3% in the major cities in 2020, with lower single-digit house price growth set to be the new normal now that lower mortgage rates have largely been factored into to property values.”6
Cooper Associates Mortgages
Samantha Jackson, Group Managing Director of Cooper Associates Group, commented:
“With the Conservative win in December 2019, and Brexit due on the 31 January 2020, we are already feeling the effects of the Brexit bounce. Those consumers who have been putting off any property related move due to uncertainty are now acting which suggests a positive year ahead. Mortgage interest rates remain low with lender appetite remaining consistent. Despite the uncertainty surrounding the market, 2019 was an exceptional year, predominantly driven by first-time buyers, many of which have been utilising the Help to Buy Equity Loan Scheme, due to end in 2023. Additionally, irrespective of the political climate, consumers still need to move and often remortgage their homes, proving how resilient the market has been despite so much uncertainty.”
There is no telling precisely what will happen in the next 12 months. While 2020 looks arguably brighter than 2019, some uncertainty does remain; it is yet to be determined whether we are leaving the EU with or without a trade deal, and what impact that will have on the economy.
If you are considering purchasing a property, for yourself or as a Buy-to-let, or remortgaging your existing property, do not hesitate to take advantage of our expertise. Our Mortgage Advisers are available between the hours of 8am to 8pm during the working week, and are also available for weekend appointments. All appointments are without obligation.
For more information, or to arrange to speak to one of our Mortgage Advisers, call 01823 273880 or complete an enquiry form and we will contact you as soon as possible.