UK house prices will rise by 2% in 2020 before staying flat in 2021, Hamptons International has predicted.
House prices are expected to see the biggest increase in Wales (3.0%), followed by London (2.5%), Yorkshire & the Humber (2.5%) and the North West (2.5%).
Next year West Midlands is predicted to see the biggest fall (-1.5%), followed by London (-1.0%) and the South West (-1.0%).
Aneisha Beveridge, head of research at Hamptons International, said: “The housing market’s strong start to 2020 soon came to a halt with the rise of Covid-19.
“But after seven weeks of lockdown the market began to recover quickly. The market was buoyed by pent-up demand going back to 2016 as well as a rise in the number of households making lockdown-induced lifestyle changes, all topped off by a stamp duty holiday.
“We believe house prices are set to rise across Great Britain and will end 2020 having picked up from where they started at the beginning of the year.
“But the real challenges won’t be felt until 2021. The economic consequences from the Covid-19- induced recession will pull the housing market from its long-term growth trajectory. While some economic recovery should have taken place to cushion the withdrawal of government support, we still expect the housing market to slow next year.
“In line with a gradual economic recovery, we forecast house prices to rise again in 2022 and 2023. The housing market will fall back in line with its historical cycle, with Northern regions expected to see the greatest price growth, further closing the gap with those in the South.”
Hamptons said it is assuming that a trade deal is agreed with the EU at the turn of the year and that a vaccine becomes available in the first half of 2021.
This post has originally been featured in Property Wire.