2020 forecast of 2% price rise as election gives window of certainty
The majority government result could pave the way for pent-up demand to be released in the spring market.
Rightmove forecasts a 2% rise in price of property coming to market in 2020 as the majority government gives home movers a window of certainty for an active spring moving season.
Rightmove’s property expert Miles Shipside said: “With much of the political uncertainty removed, we expect that the number of properties for sale will recover as more new sellers come to market, making up some of this year’s lost ground.
“However, property supply is still limited, with estate agents having the lowest proportion of properties available for sale in two years, and this will fuel modest gains in the national average asking price of property coming to market.
“The fundamentals remain sound with low interest rates, lenders competing to lend, high employment, and average wage growth outstripping house price growth and helping buyer affordability.”
Rightmove measures the prices of 95% of property coming to market, and while our prediction of a 2% price rise in 2020 is more than twice the current annual rate of 0.8%, it’s still a relatively marginal increase as it’s a price-sensitive market.
One year ago we forecast that there would on average be no upwards price movement, with 2019 seeing a subdued 0% price change given the uncertain outlook and stretched buyer affordability.
2019’s annual rise stands marginally above our forecast at 0.8%, with a stronger than anticipated end to the year. This month’s 0.9% fall is the smallest at this time of year since December 2006. Prices are being under-pinned and pushed upwards by demand outstripping supply.
Demand from buyers has remained almost level, with the number of sales agreed so far in 2019 down by just 3% on the same period in 2018 despite the political uncertainty. In contrast, the number of properties coming to market is down by 8%.
Shipside added: “First-time buyers are the drivers of the market. Too many are struggling to save the necessary deposits, and not all of them want to buy a new-build home through Help To Buy.
“More ways of getting more people onto the ladder would help to limit rising rents, increase liquidity and transaction numbers in the housing market, and make the dreams of their own roofs above their heads a reality for many more of the younger generation.”
To read December’s House Price Index in full, click here.