Pent-up housing demand from previous uncertainty gives opportunity for more active spring market in 2020
The Conservative Party’s majority Government will lead to higher property prices next year, Rightmove has predicted in its latest House Price Index.
According to the property portal, Boris Johnson’s win in the General Election held earlier in December gives owners looking to move a “window of certainty for an active spring moving season”.
Rightmove said price indicators suggest that housing demand is still strong as we approach 2020, with asking prices declining by 0.9% between November and December, the lowest rate for this time of year since 2006.
Year-on-year, however, prices remain up by 0.8% compared with last year, surpassing Rightmove’s forecast for this year of no net change in prices made at the end of 2018.
However, they warned that supply is still an issue, with the number properties coming to market falling by 8% in 2019 whilst sales agreed have declined by 3%.
Overall housing market fundamentals remain strong though, with buyers still benefitting from low mortgage interest rates leading to competition amongst lenders, while high employment and strong wage growth are contributing to better buyer affordability.
In 2020, Rightmove predicts property prices will rise by 2% off the back of the renewed certainty from the election, with the firm’s Director Miles Shipside commenting:
“The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand.
“Given the Brexit track record to date, further political twists and turns should not be ruled out, though with a large majority there is a higher possibility of an end to the series of Brexit deadlines, and the prospect of an orderly resolution.”
In our latest housing market insight article, we explore what the results of the General Election mean for the industry, and what property investors can expect from this Conservative Party Government from next year.