London house price forecast:capital expected to lag behind rest of country until 2025 as buyers relocate
The forecast points to house price rises in the capital over the next five years but expects them to fall way behind the rest of the country.
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London house prices are set to lag far behind the rest of the country until 2025 as buyers seek more space and “reassess their work-life balance” after the pandemic, forecasters say.
Agents Savills predicted that the capital’s property market will rise 12.7 per cent between 2020 and the end of 2024, well behind the national average of 20.4 per cent.
That would make London the weakest regional market in the country, with prices going up at only half the rates of the north of England and Scotland and well behind the South-East commuter belt.
Nevertheless Savills upgraded its five-year forecast rise in prices in London from its previous projection after the surprisingly rapid bounceback in the property market since lockdown ended.
Savills’ head of residential research Lucian Cook said: “Many people are reassessing their work-life balance, seeking a change of location or a trade up the ladder.
"The unexpected stamp duty holiday has given a further boost to the market, particularly in higher-value locations through the commuter zone and lifestyle relocation hotspots … that points to stronger growth in London’s hinterland.”
The latest forecast came amid a slew of new warnings about the impact of the latest restrictions to counter coronavirus on the economy of central London.
"A report commissioned by consultancy Arup said that London’s vast arts and culture sector will lose £5.4 billion of output over five years even with a “return to normality”.
In a grimmer scenario, with repeated seasonal outbreaks of Covid-19 this could rise to £15 billion.
In an introduction to the report, Professor Tony Travers, director of LSE London, said: “The UK’s soft power depends on the heart of London. People from all over the world feel they know the sights and sounds of the West End.
“The damage caused by an unmitigated assault from Covid-19 would not simply mean that a few theatres, cinemas and restaurants had closed. Britain’s glorious, remarkable and unique culture would be damaged forever.”