_Outlook: 2020's UK Property Market
Prime Central London prices are expected to rise by 18% over the coming five years forecasts Knight Frank, with the East and South East of England close behind with an expected price growth of 17% by the end of 2024.
The IMF has predicted the global growth forecast to rebound to 3.4% in 2020, after the slowest growth rate for a decade in 2019, with the GDP expected to bottom out in the first quarter of 2020, before improving later in the year.
With regards to International property investment into the UK, there appears to be a shift in focus by Chinese investors away from the US to alternatives including the UK, due to the Chinese economic growth rate expecting to decline further in 2020.
Due to the current climate in Hong Kong, there is likely to be a growth in the export of capital, with the UK, Australia, Singapore, some European and other Southeast Asian markets most likely to benefit the most, with real estate being a key target for investors.
Gulf-based investors and owners of London and UK property have benefitted since mid-2016 from the attractive Pound Sterling exchange rates on US Dollar pegged currencies, including the Emirati Dirham. The recent landslide victory for the Conservative Party in the UK election is expected to see a release of restrained demand for prospective purchasers, including many from the Gulf region, which should provide a boost to UK property prices. In particular, in the Prime Central London areas surrounding Hyde Park and the River Thames - locations well-known to many Gulf nationals.
Henry Faun, Partner, Head of London International Projects Sales, MENA comments
"The escalating prices will be underpinned by a more positive outlook on the UK economy over the next five years. Gulf buyers of London property looking to benefit from the attractive market conditions and currency discount will need to move quickly to take advantage of the favourable market conditions before the currency play erodes."
Henry continues, "Prospective buyers should also consider the prospect of Stamp Duty Tax changes and rising interest rates, as the potential to reduce returns. Seeking advice from advisors is key when making decisions on London and UK real estate, as we enter this transition period in 2020."
The growth is not isolated in London however, with Knight Frank predicting mainstream UK prices to climb by an average of 15%, while Greater London properties will see a slightly lower growth of around 13%.
The North of the UK is also one to watch, particularly as its housing cycle is well behind London's, so there's still substantial opportunity for price growth in 2020 and beyond. The most affordable regional cities will record the highest price growth, at 4 per cent over 2020, predicts Richard Donnell, research director at Zoopla.
Plus, Prime Minister Boris Johnson has pledged to spend billions in infrastructure in the UK, in his bid to maintain the votes the Tories won from Northern regions, so expect Manchester, Liverpool, Sheffield, Leeds and Nottingham to have a successful year.
And though housebuilding has slowed nationally, there are pockets that will see "a large concentration of new completions from next year onwards," says Oliver Knight of Knight Frank research – and they are primarily in the North.