UK house price growth is likely to slow in the second half of the year as the stamp duty holiday reaches its end and government support schemes are withdrawn, according to the Residential Forecasts and Outlook Q1 2021 by Cluttons.
Rents in prime Central London are expected to bounce back slightly this year after a very poor 2020. Next year could see strong growth for both sales and rental values as the London economy, and its global connections, get back closer to normal.
At national level, while the report predicts modest growth over the next two years, the shape of their forecast sees growth peak in Q2 this year before slowing rapidly over the rest of 2021 as the stamp duty holiday reaches its scheduled end date, pent-up demand is exhausted, and furlough and business support schemes are withdrawn before the economy is fully recovered. In 2022 small falls are expected as demand weakens, before values finish the year approximately flat.
Sophy Moffat, head of research at Cluttons, added: “From Q4 there is considerable uncertainty, as the return to previous tax levels coincides with the scheduled end of furlough and the expectation that unemployment will rise substantially from its current, artificially low, level.”