Advertisement

'Twenty per cent house price rise by 2022 if we get post-Brexit EU trade deal'

A leading estate agent is predicting a 20 per cent house price boom by 2022: AFP/Getty Images
A leading estate agent is predicting a 20 per cent house price boom by 2022: AFP/Getty Images

The stagnant central London property market is heading for a dramatic bounce if Theresa May avoids a “cliff-edge” hard Brexit in 2019, a leading estate agent forecast today.

Prices could surge by as much as eight per cent in 2020 once the country’s future outside the European Union has been settled — with further rises in the following years.

Predictions from Savills suggest that values could surge by more than 20 per cent in total by 2022, more than recovering all the ground lost since the market peaked in 2014.

But the upbeat projections are based on a scenario in which Brexit negotiations result in a free-trade deal with Brussels and transitional arrangements are put in place “to minimise business disruption.”

The recovery will be much less marked outside the centre, with prices forecast to rise by only 10.2 per cent by 2022 — although they have fallen less sharply over the past three years.

Yolande Barnes, head of world research at Savills, said: “We think the risks regarding London’s position as a global commercial centre have been overplayed.

"Whatever the challenge from other cities, London will almost certainly remain a key global financial centre and develop as one of several European hubs for the growing tech sector.

"Its prime markets will therefore benefit from new domestic wealth generation as well as attracting wealthy international buyers.”

But she warned that prices will flatline for two more years before the recovery fully takes hold. Prices this year to date have fallen 3.2 per cent in central London and 2.1 per cent in outer London.

That brings the total slump from the market peak in 2014 to 15 per cent and 4.7 per cent respectively. Since then, demand from foreign buyers has dried up as a result of higher stamp duty rates and the slow progress of Brexit talks.

Lucian Cook, head of UK residential research at the agency, said: “Where sellers are pricing for today’s market, transactions are proceeding, but the market is highly discretionary and price growth is not anticipated until there is clarity over the UK’s future relationship with Europe.”