The Future of UK Housing: Price Predictions for the Next 5 Years

Dear Investors,

As the CEO of PHOREE Real Estate, I am excited to bring you a comprehensive analysis of the UK housing market's future. This analysis is based on expert predictions and current market trends, providing you with valuable insights for your investment decisions.

The Current State of the UK Housing Market

The UK housing market has experienced a significant slowdown due to economic challenges and a surge in house prices since March 2020. According to Nationwide, UK house prices have fallen by 1.1% over the past year, marking the first annual decline in nearly three years and the lowest level since November 2012. Sellers are discounting their homes to achieve a sale, with an average reduction of ￡14,100, erasing a third of the gains made during the pandemic.

UK House Price Predictions for 2023-2024

The housing market is predicted to slow down due to the expected base rate rise, resulting in high mortgage rates. Fewer buyers will be able to afford homes, leading to a drop in house prices. Savills anticipates that the base rate will reach 4% in early 2023 and remain at that level until mid-2024 before decreasing. Capital Economics forecasts that the base rate will reach 5% in 2023 before dropping to 4.25% in 2024.

Estate agents Savills and Knight Frank predict that house prices will decline by 10% and 5%, respectively, in 2023. Capital Economics forecasts that house prices in Q4 of 2023 will be 8.5% lower than in Q4 of 2022.

UK House Price Predictions for 2025-2027

Savills predicts a more significant 7% increase in house prices in 2026 if mortgage lenders reduce rates in the next year, and the base rate drops from mid-2024 due to falling inflation. The Office for Budget Responsibility (OBR) predicts a property price increase of 3.5% in 2027, while Statista forecasts an average house price growth of 1.7% between 2023 and 2027.

The UK Rental Market Predictions

The UK rental market is undergoing notable transformations, particularly in London and Birmingham. UK-wide rents are expected to increase annually by 3 – 4% between 2023 and 2026. However, there’re regional variations, with rental growth in city centres, predicted to be as low as 1% in Edinburgh and Glasgow and as high as 6% in Manchester and London.

The Buy-to-Let Market in the UK

Rising mortgage rates, inflation, and changes in tax and regulations are putting pressure on landlords with buy-to-let portfolios. However, holding onto a property can be a wise decision if you have a solid financial cushion and can manage mortgage payments.

Conclusion: Making the Right Choice with PHOREE Real Estate

Whether you're interested in the UK's housing market or the rental market, PHOREE Real Estate is here to help. Our team of experts can provide you with the latest market data, personalized advice, and a range of services to help you navigate these markets and make informed decisions.

In conclusion, the UK housing market offers unique opportunities for property investors. With the right guidance and expertise from PHOREE Real Estate, you can make the most of these opportunities and achieve your investment goals.

Best Regards,

Munawar Abadullah,

CEO, PHOREE Real Estate.