house prices

House prices predicted to rise by 2% in 2020

Rightmove is predicting UK house prices will rise by 2 percent in 2020.

The online listings portal says the stability of a new government will encourage home movers to bring their properties to market in the spring.

Demand for homes stayed high throughout 2019. But the market was stymied by a lack of supply.

Landscape looks good for buyers

The new year, the prospect of a more resilient political environment and the prospect of better sale prices are all likely to act as a spur to those intending to sell, says Rightmove.

While interest rates remain low, lenders are competing to entice home buyers with good mortgage deals.

Meanwhile, high employment and average wage growth outstripping house price growth is helping buyer affordability.

Greater certainty in market

Miles Shipside, Rightmove’s director and housing market analyst, said: “The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season. There could be some release of several years of pent-up demand.

“Given the Brexit track record to date, further political twists and turns should not be ruled out.

“However, with a large majority [in parliament], there is a higher possibility of an end to the series of Brexit deadlines and the prospect of an orderly resolution.

“Rightmove measures the prices of 95 percent of property coming to market.

“We predict that buyers and sellers will on average see a 2 percent rise in those prices by the end of 2020.

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

North can expect to do best

Shipside said home buyers and sellers should expect to see regional variations.

He added: “London is finally showing tentative signs of bottoming out. And we expect a more modest price of plus-1 percent 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 2-4 percent.”

1st-time buyers need more help

Shipside called for more and better ways of getting people on to the housing ladder to escape rising rents.

He said: “First-time buyers are the drivers of the market. Too many are struggling to save the necessary deposits, and not all of them want to buy a new-build home through Help to Buy.

“More ways of getting more people on to the ladder would help to limit rising rents, increase liquidity and transaction numbers in the housing market. They would make the dreams of their own roofs above their heads a reality for many more of the younger generation.”