Due to political uncertainty and buyer caution, property prices look to be dictated by buyer confidence, rather than affordability.
According to Q1’s Halifax Housing Market Confidence Tracker measured by Ipsos MORI, consumer confidence in the outlook for the housing market bounced back to a net balance of +64 in March, from +60 in February.
Concerning just how confident consumers are in the outlook for the housing market over the next 12 months, 33% said they expect the average property price to have increased by up to 5%, and 25% predicted growth between 5% and 10%.
Across the UK house prices are predicted to climb by 14.8% from 2019 to 2023, taking the average house price at the end of that period to £248,086.
In the North of England house prices are expected to rise at a faster rate than London, over the next five years. Reversing a trend, stretching back to the 1980s, that saw house prices in the capital outstrip the rest of the UK.
The next five years will see house prices in the North West grow by 21.6%, 20.5 % in Yorkshire and the Humber, and 17.6% in the North East. Compared to single digit growth of 4.5% in London, and 9.3% in the South East.
Boost for Build-to-Rent
In 2017/2018, Build-to-Rent (BTR) output increased by 49% with number of units expected to rise by approximately 10,000 over the next 2 years.
Currently 20% of UK households live in the private rented sector, and over the next 15 to 20 years it’s widely believed that more people will rent than own homes. With demand high measures are being taken to encourage the construction of more BTR developments.
Standardising the calculation of housing delivery targets and measures to hold local authorities to account for homes built in their area could result in more planning consents in areas of high housing demand.
Reforms include: requirements for councils to publish projections for future housing demand and review every five years, focusing on high-rise and city centre developments, and greater collaboration between neighbouring Local Planning Authorities.
Increased Diversity on Large Sites
The Letwin Review advised that greater diversity was needed to meet demand in areas of high housing need.
Diversity of size, type, and tenure of housing should be encouraged on large sites of 1,500 units or more to quicken development. This could mean additional affordable housing or BTR homes.