Residential property prices will surge by more than £50,000 over the next four years despite Brexit uncertainty, economists predict.
The average UK house price across the whole of 2017 will be £220,000, marking a £9,000 increase compared with 2016, supported mainly by a shortage of homes in the market, according to the Centre for Economics and Business Research (Cebr).
By 2021, the average home is set to be worth around £272,000, Cebr’s report forecasts, which would be £52,000, or 23.6% higher, suggesting that consumer confidence in the UK housing market will remain healthy.
Cebr estimate that property values rose by about 7.5% in 2016, but forecast that prices will climb at a slower pace over the next couple of years as Brexit negotiations take place, with annual increases of less than 5%.
But from 2019, growth is expected to pick up, with an annual increase of 5.7% pencilled in for that year and an annual rise of approximately 6% in 2020 and 2021.
Kay Daniel Neufeld, a 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.”