Despite Election 2015 Uncertainty Property Market will be UP

Bucking the trend of several agents, Knight Frank is forecasting that even the uncertainty of the general election will not stop the mainstream housing market rising next year, with prices forecast to increase on average by 3.5 per cent.

Rents will rise across the UK too, by an average of 2.2 per cent next year.

Over the long-term, prices will appreciate 18.2 per cent over the five years to the end of 2019.

“This rising appetite for property comes against the continuing shortage of new housing stock in the UK, putting strong upward pressure on prices in some areas” says the firm’s head of UK research, Grainne Gilmore.

“This has been especially evident in London, where both the fundamental lack of supply of new homes and a lack of existing stock on the market have combined to deliver large double-digit annual growth in prices in some local authorities just outside the central areas.”

Knight Frank says that in London – where some other agents think political uncertainty over the election and a possible mansion tax will cause price falls – values will actually rise in 2015 by 3.5 per cent and then escalate a total of 25.8 per cent by 2019.

Construction activity has picked up markedly over the last year, but the Knight Frank forecast states that the large shortfall in the delivery of new homes in the coming years will maintain price levels in the coming years.

The lowest performing regions of the UK, the firm predicts, are the north east and north west, which will both see 14.2 per cent average increases in the next five years. Both regions will see a 3.0 per cent rise in 2015, it forecasts.

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