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House Prices set to bounce this year

Date Published 17 January 2020

Coming off the back off a pretty poor year for selling houses, with transactions and prices down locally and across the South East, 2020 promises to be a good year for property and we explore this in this edition.

With 2 attempts at Brexit and an election the market really lost confidence in 2019. The election did, however, provide us with some much-needed certainty and this is what the property market craves.

Back in 2016 I predicted a couple of troubling years for property and mentioned the housing market cycle, which predicted a mid point recession before 7 years of further growth. According to the model, we may now be at the start of 7 years of growth.

Supporting property prices are increases in average wage inflation, low levels of unemployment and ultra-low borrowing costs. What should also help kick start the market is the velocity of money. The money growth supply has averaged 2.2% year on year and 80% of the growth in money supply goes into loans and mortgages. The last couple of years has seen this money available, but not fully spent and this year could see the velocity of spending increase as the market has held back for more certain times. This will feed through into increased level of transactions and increased prices and I will be as bold to say that I feel that we could see price rises of up to 5% this year.

If you want to understand more about the market in 2020, please do feel free to contact us.

Paul Davies
Director of @Home Estate Agents and About Mortgages Ltd