Property price predictions for 2020
House prices are expected to grow in 2020, but at a weaker rate than this year, Halifax has predicted.
The lender has forecast UK house price inflation between 1% and 3% in the next year.
In 2019 it had predicted 2% to 4% growth and said this had transpired to be correct, although the housing market performed at the lower end of its predicted range.
Halifax noted that a shortage of homes for sale, low levels of house building and challenges facing first-time buyers will continue to support high prices and constrain demand in the short-term.
Russell Galley, managing director of the lender, said: “The housing market in 2019 followed a similar path to recent years. Modest price growth was supported by falling mortgage rates and a low volume of houses for sale, factors which can in part be attributed to elevated uncertainty. This helped to underpin a degree of resilience in the market.
“Prospects for 2020 look a bit brighter, with uncertainty in the economy falling back somewhat, transactions volumes anticipated to pick up and further price increases made possible by growth in households’ real incomes.
“However the shortage of homes for sale and low levels of house building will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand.”
“Longer-term, a renewed focus on housing policy and increased infrastructure investment aimed outside the South East, for example, could help rebalance regional house prices,” said Galley. “However, it’s important to note that any policy changes would be unlikely to impact the market in 2020.
He added: “Although prices will be supported in the near-term by insufficient new building and low interest rates, a sustained period of price growth below income growth as a result of policy action would help to address first-time buyer difficulties.”