House prices to rise 4.4% despite Brexit negotiations: Cebr
Mortgage approvals are nearing post-crisis heights, boosted by low interest rates and favourable borrowing conditions.
UK house prices will continue to rise in 2017, despite uncertainty surrounding Brexit negotiations, according to the Centre for Economics & Business Research.
The Centre says a mix of factors is currently at play in the UK housing market, including the rise in stamp duty on second homes and the changes in buy-to-let mortgage tax relief, which have "taken steam out of the market".
Cebr predicts that the average house price will rise to £220,000 in 2017 though at a lower growth rate of 4.4%.
This is below the rate of 7.4% seen in 2016 and the slowest rate since 2013.
Cebr then expects house price growth to remain subdued at 4.1% in 2018 before picking up again from 2019 onwards.
Kay Daniel Neufeld, Cebr economist and main author of the report, said: “Already towards the end of 2016 indicators pointed to a stabilisation in the housing market, a trend that has continued in the first months of 2017.
“Transaction numbers are slowly recovering from the introduction of a stamp duty surcharge on second homes in April 2016, which has led to considerable distortions in the market.
“Mortgage approvals are nearing post-crisis heights, boosted by low interest rates and favourable borrowing conditions.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented: “Today’s figures from Cebr should actually be welcome news for the housing market, showing that house prices are finally starting to rise closer to inflation. Despite a reduction in the momentum of house price growth, currently predicted at 4.4%, the underlying fact remains that our housing market is hindered by an imbalance between supply and demand."