HM Treasury has recently updated its consensus forecast for UK house price growth over the next five years. Property prices are expected to rise by 2.8% during 2018, higher than many predicted at the start of the year.
While the Governor of the Bank of England has stated house prices may fall by a third in the event of a ‘no-deal’ Brexit, a situation that has occurred only once in the last 45 years, recent murmurings suggest a ‘no-deal’ scenario is less likely than many thought a few weeks ago.
Based on the Treasury forecasts, the average price of a property across the UK is expected to rise by over £27,000 over the next five years.
With affordability a key concern in the market, the Treasury expect earnings to rise on a par with house prices during 2018 and exceed price growth in 2019, 2020 and 2021. Inflation is anticipated to fall back from 2.4% in 2018, to 2.1% in subsequent years.