House prices in the UK are set to rise by a cumulative 33% between 2007 and the end of 2017, according to the latest research by BNP Paribas Real Estate. Prices are forecast to grow by 2.5% this year; a significant improvement on 2012 when prices fell -0.9%.
The leading international real estate adviser has published its latest Housing & The Economy report – its annual house price forecasts put together with Professor Patrick Minford, a former economics adviser to Margaret Thatcher and the current Professor of Economics at Cardiff Business School.
London is set to lead the UK house price recovery with 69% cumulative growth between 2007 and the end of 2017. Growth last year in London was 1.6%, growth this year will be 6.8%, but in 2014 it is forecast to rise to 8.6%, BNP Paribas Real Estate predicts.
BNP Paribas Real Estate’s Executive Director, UK Residential, Adrian Owen, commented: “This year is expected to be a turning point for the housing market, with house prices forecast to rise across all regions. Price rises will not be confined to this year, but look set to continue to the end of our forecast period in 2017. Admittedly there will be considerable variation in growth rates across the country, but it will certainly be an improvement on 2012, when house prices fell in all regions except London and the South East.”
“Last year we were labelled bold with our 2013 growth forecast of 6.6% in London but it is good to see the market now concurs and in fact this year’s growth will be even slightly higher than we predicted,” added Owen.
The South East (outside London) is the second biggest winner behind London, in terms of house price growth, with cumulative growth of 50% forecast between 2007 and the end of 2017. In 2013, growth will be 4.3%.
The South West follows with 43% predicted growth between 2007 and the end of 2017, with growth this year forecast at 2.2%. The Eastern regions and West Midlands have price growth predicted of 38% and 25%, respectively.
Between 2007 and 2017, East Midlands will see cumulative growth of 29% and Yorkshire will see cumulative growth of 16%. The lowest growth is forecast in the North West and North East, with cumulative rises in house prices predicted at 13% and 12%, respectively.
Joanne Warren, associate director within BNP Paribas Real Estate’s research department, concluded: “Going forward, as the housing market recovery gains strength and demand levels grow, the pace of price rises will accelerate. Next year UK house prices are forecast to grow 6.1%, which is more than double the 2013 rate. The growth rate will then increase year on year and in 2017 UK house prices are forecast to rise 8.0%. Although positive growth is forecast for 2013 and 2014, it will not be until 2015 that UK house prices return to the 2007 pre-recessionary market peak.”
BNP Paribas Real Estate is a major player in the residential real estate market: £1.2bn in Land; £12bn GDV; and 35,000 units in the last 12 months.