New buyer demand continues to outweigh supply despite the potential stamp duty savings.
According to Savills’ recent update report, UK house prices are now expected to increase by 9% revised from their previous 4% back in March. They stated that the latest price increase reflected the unique market conditions and the shortage of quality dwellings.
This forecast also suggests, in 2022 capital growth will reach 3.5%. And during the 2022-2025 period it forecasts an increase of between 11% and 12% in values, bringing total growth to the end of 2025 to 21.5%. Nevertheless, given the exceptional conditions of the past 18 months, the growing trend over the next 4years would be trickier to accurately forecast. Rises in Interest rates were also factored into the forecasts, with Savills’ projections assuming a Bank of England base rate not exceeding 0.5% by the end of 2025.
It would appear that in Savills report conditions since the market reopened in 2020 – including more affluent buyers entering the market and economic recovery reducing unemployment rates – as well as the predicted “slow and modest” rise in interest rates steadily limiting affordability – underpinned its five-year expected capital growth.