Good and bad news: house prices up in 2019, but not in central London

Estate agency Strutt & Parker says that despite Brexit and the economic and political uncertainty accompanying it, house prices in the UK are still likely to grow 2.5 per cent in 2019 - but it’s a very different picture in prime central London.

“We are holding our forecast for UK growth at 2.5 per cent for 2019 – with the five year forecast from 2018 to 2022 standing at 18.0 per cent” explains Stephanie McMahon, head of research at the agency. 

“Total transaction levels for England and Wales in 2018 look to be relatively equivalent to those in 2017, when looking at the country as a whole. We would expect this trend to continue into 2019 with the number of registered buyers and viewing numbers gradually increasing” she adds.

But McMahon cautions that it will be a very different picture in prime central London where transaction levels continue to be low by historic standards.

“We have revised down our forecast for PCL house price performance which stands at 2.0 per cent growth for PCL house prices in 2019 as a best case scenario and down 5.0 per cent as a downside risk. Substantial economic and political uncertainty remains both nationally and globally and this does not look likely to change any time soon” she says. 

“The likely outcome of Brexit negotiations remains extremely unclear, with the potential for this uncertainty to continue longer than we hoped for. In London, we expect to see stagnant prices of further negative growth in the final stage of 2018 with the possibility of further price decreases continuing into 2019” McMahon warns. 

“Beyond 2019 it is extremely difficult to forecast the market with any certainty and we would expect some bounce back once more stability has returned. The fundamentals of the UK economy remain broadly positive, with sentiment remaining cautious.”

* Three senior figures at BNP Paribas Real Estate - all former Strutt & Parker experts - have left the business in  a round of redundancies revealed yesterday by the trade publication Property Week. They all worked for the retail and commercial section of BNP Paribas, which had been hit by market problems during 2018.