2019 residential property forecast from Strutt & Parker

2018 is drawing to close, but what can we expect from the residential property market in 2019? Leading estate agents, Strutt & Parker, give their forecast for the coming year.

House price growth

Stephanie McMahon, Head of Research at Strutt & Parker, said: “We are holding our forecast for UK growth at 2.5% for 2019 – with the 5 year forecast from 2018 to 2022 standing at 18.0%. Total transaction levels for England and Wales in 2018 look to be relatively equivalent to those in 2017, when looking at the country as a whole. We would expect this trend to continue into 2019 with the number of registered buyers and viewing numbers gradually increasing.”

“However, the story in Prime Central London (PCL) is different and transaction levels continue to be low by historic standards. We have revised down our forecast for PCL house price performance which stands at 2.0% growth for PCL house prices in 2019 as a best case scenario and -5.0% as a downside risk. Substantial economic and political uncertainty remains both nationally and globally and this does not look likely to change any time soon. The likely outcome of Brexit negotiations remains extremely unclear, with the potential for this uncertainty to continue longer than we hoped for. In London, we expect to see stagnant prices of further negative growth in the final stage of 2018 with the possibility of further price decreases continuing into 2019. The prediction for the PCL lettings market is slightly more positive, with the forecast for 2019 at 1.5% rental price growth.”

Regional hotspots – Top 10 list of the UK's best connected places with privacy

By mapping six criteria including superfast broadband, connectivity by public transport, lower density housing and social media traffic, Strutt & Parker has devised a top 10 list of locations throughout the UK which enjoy high connectivity whilst remaining relatively private.

• Banbury (Oxfordshire)
• Buxton (Derbyshire)
• Horsham (West Sussex)
• Linlithgow (Scotland)
• Llandudno (Wales)
• Loughborough (Leicestershire)
• Malton (Yorkshire)
• Penrith (Cumbria)
• Sevenoaks (Kent)
• Totnes (Devon)

Explanation of criteria used to map areas with:

• Superfast broadband
• A lower density than urban city locations (providing more privacy)
• Connectivity - 60 minutes or less public transport (no changes) on rail to a major city/hub
• Decent housing stock within 3 miles of the train station
• Over 100,000 Instagram posts for the place (since Instagram launched) – Instagram post quantities show 'community, pride of place, tourism, character' or Over $10,000 economic value for a week on twitter – shows activity level of broadband and value of the tweets for that place

Banbury scored highly for connectivity due to its commute time into London of less than 60 minutes and a superfast broadband average figure of 99.1%. With an average house price just over £250,000 it has good quality housing stock and also a strong sense of place according to Twitter and Instagram – the hashtag #Banbury has been used over 54,000 times.

Other regional hotspots to watch in 2019:

Bath, Somerset – small city well connected to London by rail and road

James Mackenzie, Head of Strutt & Parker's National Country House Department, said: “After a slower start, the market in Bath picked up momentum in the second half of 2018. One group of buyers are parents from China buying properties for their student children who attend the University: rather than renting, they want to see their long term investment grow. British expats from Asia, who are often paid in dollars, are taking huge advantage of the weak pound right now seeing Bath as a new city of choice. Despite its relatively small size, Bath has more charm and depth than neighbouring cities like Bristol.”

Canterbury, Kent – new fast speed rail link into London keeping market buoyant

Ed Church, Head of Strutt & Parker's Canterbury office, said: “Kent has seen another busy year. Thanet is benefitting from High Speed connections and remains relatively affordable. The railway line from London via Canterbury to Ramsgate is set to see faster journey times within the next two years, and buyers are arriving in anticipation of that. Canterbury West already enjoyed fast journey times of just 57 minutes into St Pancras station and this has had a big impact on the property market within a two-mile radius of the station. Restaurants are opening up all around the hub of West Gate Towers and road improvements such as the Sturry bypass will help certain areas to the east of Canterbury when work is completed.”

Harrogate, Yorkshire – thriving town market seeing an increase in London returners and baby boomers wanting an urban amenity-rich environment

James Wort, Head of Strutt & Parker Harrogate, said: “Buyers in Harrogate moving back from London are up 20% from last year. Usually families in their 30s and 40s who already have roots in Yorkshire are attracted by the schooling and being closer to grandparents. We are also seeing baby boomers swapping their historic rural country pile for a townhouse within walking distance of amenities and this is a trend set to continue in 2019. With very few houses in the pipeline in Harrogate, stock levels are tightening.”

Notting Hill, London – W11 bucking the trend in Prime Central London with strong pool of British buyers

Charlie Willis, Head of London Residential at Strutt & Parker, said: “Our Notting Hill office has had its best year in terms of volume of sales in 2018 since it opened its doors seven years ago; doing more than double the number of transactions in 2018 vs 2017. Some properties, with price tags of up to £25 million, have sold in sealed bids situations within a matter of days. We anticipate another good year for the Notting Hill market in 2019, even against a very complex political climate, due to its beautiful houses that families want to live in for the long term.”

Waterside

Strutt & Parker's 2018 Waterside Survey showed that young adults are driving the demand for waterside living in the UK. In contrast to the popular perception that it's mostly older retirees who aspire to live by the water for health and relaxation reasons, the survey results highlight that over a quarter (26%) of under-35s and over a third (36%) of 35-39s are actively looking to live near water within five years, along with and 27% of 40-44s. This compared to just 12% of over-45s.

The rise in flexible working is helping to facilitate the move to waterside living among young professionals. Among employed adults already living in waterside properties, 49% work from home. This rises to 61% of employed adults in their early 30s (30-34) and 78% in their early 40s (40-44). Those working from their waterside properties do this for three days a week on average. The Telecommunications, Technology, Internet & Electronics sector is one of the industry sectors driving the trend, with 77% of workers in this kind of job working from their waterside home. This compares to 25% in Education and 33% in Healthcare & Pharmaceuticals.