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UK property prices to rise by more than 20% over next five years

Knight Frank has predicted solid price appreciation for UK property between now and the end of 2020 in its latest Residential Forecast. The firm reports: ‘Last year we correctly anticipated a slowdown in UK house price growth in 2015. While the market may end the year slightly ahead of our predictions, a continued moderation in price growth underpins our latest forecast.’

The key findings from the report included:

  • Cumulative growth in UK prices will total 20.3% in the five years to the end of 2020.
  • In the prime London and prime country markets higher transaction costs will continue to weigh on activity and price growth in 2016 as the market absorbs stamp duty.
  • Prime central London prices are forecast to rise by 2% in 2016 and by 20.5% cumulatively by 2020.
  • The risk that UK interest rates rise more rapidly than expected or that the global economy suffers a notable slowdown in activity remain the biggest risks to the UK housing market.

Liam Bailey, global head of research at Knight Frank, commented: “The price differential between most prime markets and the capital is likely to underpin price growth in 2016. As the economy continues to recover and house prices outside of London show further growth, the trend for more London buyers to move will gain traction, boosting the ripple effect from the capital.”

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