According to the latest report from property agent Savills, house prices in the East of England could be set to rise by almost 10% by the year 2023. House price growth of 9.3% in the region is below the national average of 14.8% from 2019 to 2023, with the report highlighting significant variations in projected property price rises across different regions of the UK.
House prices are forecast to rise by 21.6% in the North West, and 20.5% in Yorkshire and Humberside, far outstripping the projected growth in the East of England. However, the region’s house price performance equals that in the South East, and stands in stark contrast to London, where property prices are expected to rise by just 4.5% over the next five years.
Commenting on the projected house price performance for the region, Louis de Soissons, head of residential at Savills Norwich, said: “The market in Norfolk is price sensitive, especially at the top end, and those selling need to be realistic in order to achieve a successful outcome. The strongest market is between £400,000 and £700,000 with a bias towards urban rather than rural areas. That said, picturesque cottages and farmhouses in good locations remain sought after by our buyers, around half of whom come from London and the Home Counties.”
He added: “Pretty villages which still have facilities are especially popular and there is a discernible desire to live within walking distance of the local pub. This latest forecast for prices to firm up from 2020 is encouraging and will add confidence.”
Savills’ report also highlighted trends amongst different buyer groups across the UK property market. Cash buyers currently account for nearly a third (31%) of all property sales, while the so-called “bank of mum and dad” is increasingly providing financial support to mortgaged first-time homebuyers. Cash is also a significant component of investment and buy-to-let property purchases.
According to Savills’ statistics, the number of home movers with mortgages has fallen considerably since 2007 – from 653,000 to 370,000 – as existing property owners move home less frequently. Taking into account the “stress testing” of current mortgage affordability checks, Savills expects home mover numbers to remain relatively stable over the next five years.
Buy-to-let investment is expected to remain under pressure in the coming years as recent government measures – including tax relief changes and stamp duty surcharges on investment properties – act to curb the market.
Focusing in on the East of England, town centres in areas including Ipswich, Felixstowe and Woodbridge are currently seeing strong demand. According to Peter Ogilvie of the Savills Ipswich residential team: “Education and connectivity have always been important but we are now seeing a greater demand from buyers who want to make their lives that little bit easier. With both parents working they want to be able to walk their children to school and have a shorter commute – fuelling interest in town centre properties.”