House prices will rise by more than £50,000 in some areas over the next five years, a leading estate agent forecast – but added that growth depends on how Brexit negotiations turn out.
The typical value of a home across the country will rise 13 per cent by the end of 2021, up from £214,000 to £241,900, according to Savills – a £27,000 rise in five years.
However, the biggest monetary gain is tipped for the South East, where higher prices combined with a larger percentage increase led to a forecast rise of £53,200 over five years.
In the South East, values are forecast to increase by 17 per cent by the end of 2021, from their current value of £313,000 to £366,200.
But the East of England is expected to see the highest percentage increase in house prices at 19 per cent.
A lower current average house price there of £273,000 means this translates into a marginally lower monetary increase of £51,000 to £324,000 by 2021.
But while the forecasts map out sizeable gains in prices, the rises that are predicted will be lower than those seen across the country during the previous five years. Between 2011 and 2016 average house prices across the UK rose £47,900, said Savills.
And Savills said the increases in the next five years would depend on Brexit negotiations, which had created uncertainty in the mortgage market.
Lucian Cook, Savills UK head of residential research, said: ‘Brexit has forced the market to change gear and created uncertainty.
‘The period of negotiation with the EU is likely to be a rollercoaster of confidence.
‘Buyer sentiment across all sectors of the market is likely to be fragile during the period of negotiations to leave the EU.’
Savills added that Brexit was far from the whole story for the property market, with cash-strapped borrowers and regulation also taking its toll.
The estate agent predicted that first-time buyers will continue to find it difficult to raise a deposit without financial help from the likes of the Bank of Mum and Dad and Government schemes such as Help to Buy.
It suggested that Help to Buy may need to become a long-term feature of Government efforts to sustain house building and home ownership.
The rental market is also expected to slow next year because of Brexit, Savills said.
However, it is expected to increase at a faster rate than house prices in the next five years.
Savills expects average rents to increase by 19 per cent by the end of 2021 and by 24.5 per cent in London, where getting on the property ladder is particularly difficult due to the higher house prices.