JLL’s latest residential forecast has predicted that house prices across the North West are due to increase faster than any region outside of Greater London over the next five years, by more than 18%.
JLL is forecasting that prices are set to rise by 2% in 2017 alone. Average growth across the UK is expected to be 0.5%, while values will increase by 1% in Greater London, over the year.
Its report concludes that Brexit uncertainty will dominate UK housing markets over the short-to-medium term, but that the national market will remain reasonably strong and active despite the greater uncertainty and slower economic growth resulting from Brexit.
Across the country, transaction levels are forecast to decline from around 1.22m this year to 1.08m next year, an 11% fall, as uncertainty causes some households to defer house purchase decisions.
Neil Chegwidden, residential research director at JLL, said: “We are expecting UK housing markets to slow from current levels both in terms of transactions and price growth next year. This will be driven by Brexit uncertainty and a slightly softer economy. The outlook, however, is particularly unpredictable presently. Over the next couple of years we expect periods of volatility in terms of household and business sentiment as the Brexit roadmap unfolds but the underlying shortage in supply will provide support in value terms.”
JLL said it is very concerned about the impact that Brexit will have on housing supply and welcomes fresh and new rhetoric from policymakers both nationally and in London, but believes that it will be very difficult to even maintain current levels of housebuilding given underlying conditions. Housebuilders will inevitably exercise greater caution when times are more uncertain. Despite government initiatives JLL is forecasting England housing starts will slip from around 140,000 homes in 2016 to 134,000 next year and in 2018.