UK property to increase in value by 19% by 2019

Property consultancy Savills has predicted average house prices in the UK will rise 19.3% by 2019.

Summary:
UK house prices will increase by 19.3% over the next four years, according to Savills
The size of the private rented sector will increase as first-time buyers are priced out of the market
Buy-to-let property is set to continue to generate high rental returns for investors

Property is set to increase by an average of 19.3% to the end of 2019, according to a new five-year forecast from Savills.

Investors seeking purely capital growth may now need to look outside of London, as the capital’s property market is expected to flat line, following a period in which it has significant outperformed the UK average.

Next year will see property prices in Scotland rise the most, with property values in the country set to increase by an average of 3.5%.

“Stress testing of borrowers’ ability to service a mortgage and loan to value lending caps will increasingly limit the amount buyers can borrow, making it more difficult to access or trade up within the market,” said Lucian Cook, UK Head of Residential Research at Savills.

Inevitably this will mean that fewer people will be able to purchase their own home and first-time buyer numbers are expected to show no net growth over the next five years.

Subsequently, this will mean that investors will see rising demand for their buy-to-let property as over the same period, the size of the private rented sector is set for continued growth.

In fact, Savills’ forecast states 1.2 million more households in England and Wales will be private renters by 2019, meaning almost a quarter of all homes will be privately rented. The property consultancy explained this will present investors with new opportunities.

Earlier this year, a report from lettings agent networks Your Move and Reeds Rains found that rental returns in the UK are already at record highs.