Savills Research predicts 40 percent inflation-adjusted growth in the UK’s mainstream property market over the next ten years, much more in line with the long term average. Demand will be sustained by inventory shortages, but price growth will be constrained by more limited access to mortgage finance.
Director of Savills Research Lucian Cook said in a recent report that they expect to see an ongoing pattern of much more sober lending in the next decade, a factor that will clearly set the next ten years apart from the pre-credit crunch 2000s. The 2000s saw very high inflation-adjusted growth (71 percent) in comparison to the historic norm. In prior decades, inflation-adjusted growth was 14 percent in the 1990s, 43 percent in the 1980s and 49 percent in the 1970s.
Cook believes that the legacy of the 2000s will be a residential market split, possibly irrevocable, between the UKs equity haves and have nots. The Savills forecast anticipates sustained house price growth in the equity rich, prime hotspots from 2011 onwards, with a significant lag in areas blighted by low levels of equity, high unemployment levels and the prospect of very slow economic recovery.
“Without doubt, this points to many of the higher value prime areas which have recorded the lowest percentage growth over the noughties (2000s),” Cook added.
Brian Kinkade is a broker and team lead with Cherry Creek Professionals Realty, a full service Denver real estate firm. His team specializes in Denver luxury homes, equestrian properties and International real estate sales. Brian invites you to visit his website for more information.
