Brexit is set to weaken the wider economy and will lead to a small house price dip of one per cent in 2017 before recovering to show small levels of growth in 2018.
That is the view from Countrywide’s chief economist Fionnuala Earley.
She says house price growth is expected to slow to 2.5 per cent by the end of this year and then to dip one per cent down in 2017; then it will rise again, by two per cent, in 2018.
Greater London is likely to see price growth slow to 3.5 per cent in 2016 before a fall of 1.25 per cent in 2017 and a recovery with prices growing two per cent in 2018. Prime Central London, however, will be particularly badly hit - prices are forecast to fall by six per cent in 2016, remain stagnant next year and then rise four per cent in 2018.
Across the South and East of England price growth is also expected to slow in 2016 followed by small price falls in 2017 before returning to positive price growth the following year. Prices in the South East will dip next year.
Countrywide says the Brexit vote has unsettled the UK economy as uncertainty surrounding the arrangements for decoupling from the EU and the effect this will have on trade and future economic growth.
In addition to this, higher stamp duty continues to hit the higher end of the market the agency group says.
“The vote to leave the EU has thrown up many risks. Our central view is that the economy will avoid a hard landing which is good news for housing markets. However, the weaker prospects for confidence, household incomes and the labour market mean that we do expect some modest falls in house prices before they return to positive growth towards the end of 2017 and into 2018” says Earley.
She says the continuing lack of supply of property and very low borrowing rates will remain supportive factors for house prices.
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Ahh!! The old crystal ball method!!
Maybe I should ask Countrywide’s chief economist Fionnuala Earley for the Lottery numbers and retire on the proceeds of the winning ticket.
So Countrywide the (at the moment at least) largest UK estate agent is predicting that house prices will fall which means in turn a tighter market.
Which means the basis a lot of online agents business plan of "Take a reasonable picture and stick it on a portal to sell" is flawed as agent will have to neg, chain build and proactively sell property.
So given Countrywide are predicting this they have made senior management staff redundant (the ones that know about estate agency) Started to close offices. And start to adopt an online only approach.
I do not often agree with Paul Smith but last week he questioned how long the current management team will still be in place at Countywide. I would think not long now ......
1%? I'd be fascinated to see where she pulled that figure out from. Now more than ever, we can't second guess or predict the market.
Clearly Countrywide just want to stay in the mix with all the other corporates trying to sound as though they know what they're talking about and thinking that they're enlightening us all with their vastly superior knowledge of the industry and access to stats and information that us humble independants could only dream of. Many thanks Fionnuala, we shall plan for next year accordingly.
I worked for Countrywide for a short period last year. Quite an experience!
An unbelievably naive restructuring strategy to get rid of nearly all the senior management team which mainly comprised of experienced estate agents (many of whom had run branches themeselves) and replace them with a group of "friends" from a selection of industries other than the one they've just been charged with running. From the directives, emails, ideas and announcements that we had on a regular basis it was obvious that they had no cencept of what it's like on the coal face and the daily challenges we agents face. I will not sorry to never hear the word "retail" used again our business.
Such nonsense from Countrywide reminds me of the late 80's when Prudential installed Jo Bradley to bring "new thinking" to Estate Agency and removed him and closed the business after losing all their best people and a cool £400million in just 3 years. Is Fionnsla Early really serious that a house worth £200k will be worth £198k?Anyone with experience (and a modicum of common sense) know that it will either be £190 or £220! Anyone remember the RICS reporting a downturn of 40% just 5 years ago. I wonder where their "Cheif Economist" is today.
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