Savills expects property prices to rise by an average of 4% across the UK this year, and by 21.1% before the end of 2025. However, the firm also predicts that property prices in Yorkshire and the north-west could rise by almost 30% over the next five years, more than double the rate of growth in London.
While Savills had previously expected house prices to remain flat across the UK this year, the new measures to support the market included in last week’s budget announcement, combined with the easing of lockdown measures, have led the company to revisit its forecasts.
Lucian Cook, head of residential research at Savills, said 2021 had been set to be “a complex and uneven year” for the housing market. “But the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market.”
The company said it now expected prices to rise by an average of 4% across the country this year, and by 21.1% before the end of 2025. This would take the average cost of a home in the UK to £279,644.
Over the next five years the biggest increases are forecast to be in the north-west of England, where prices could go up by 28.8% to an average of £227,879, and in Yorkshire and Humberside, where Savills predicts a 28.2% rise, taking the average to £220,921. Prices in London are predicted to grow by 12.6% across the five-year period, taking the average to £547,868.