Losing EU workers ‘would hamper construction activity’

A rise in house prices of £44,000 over the next five years has been predicted by a recent report from the Centre of Economics and Business Research.

UK house prices increased CEBR
The average price of a home in the UK is predicted to rise by £44,000 over the next five years, according to a forecast published on Wednesday by the Centre for Economics and Business Research (Cebr).The rise in average prices will come despite the fact Cebr is predicting that the current growth rate of 6.9 per cent expected to drop to 2.6 per cent next year on the back of fears of a 'hard Brexit' from the European Union.Cebr expects these effects to be especially keenly felt in London's prime market where prices are expected to fall by 5.6 per cent next year. But in 2018, prices across the country are predicted to pick up again with a growth rate of four per cent and, by 2021, the average price, currently standing at £210,000, is expected to reach £254,000. 

Cebr report

The Cebr report said that even before June's referendum, housing market activity had been slowing in the wake of April's stamp duty increase on second homes affecting buy-to-let investors."For consumers, we expect rising inflation and increasing unemployment to squeeze disposable incomes. Weaker business investment is likely to weigh additionally on economic growth. Taken together these factors will have a dampening effect on the housing market in the coming year," said the report.It also pointed out that, across the UK, some nine per cent of workers in the construction sector were EU nationals, with the proportion reaching about a third in London.

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Kay Daniel Neufeld, an economist at Cebr and the main author of the report, said, "If immigration is reduced drastically, pressures on house prices could ease in certain areas. However, as the construction sector relies on immigrant labour skills, the UK might find it difficult to build the required number of houses to address the shortage we currently see in the market."The report also said that overseas property investors could be put off the UK housing market if they felt the nation's position as a "gateway to Europe" was in jeopardy. However, Cebr also said that the fall in the value of sterling would be a lure to foreign buyers.

Swansea and Liverpool fall behind

A separate report published on Wednesday looked at the time it took to sell a house in different parts of the UK and found that the average of 51 days in Bristol and 53 days in Edinburgh was about half what it was in Swansea or Liverpool.The study, conducted by Cebr for Post Office Money Mortgages calculated that, across the UK as a whole, a home would be on the market for an average of 91 days before being sold. Despite the high prices and lack of supply in London, the research found that a property in the capital typically took 89 days to sell – longer than in such cities as Nottingham, Manchester, Leeds, Birmingham, Plymouth and Cardiff. John Willcock, head of mortgages at Post Office Money, said, "House prices continue to rise across the country but eager sellers should remember that this might not be any guarantee of a successful sale." 

Average number of days to sell a property and average house price:

Bristol, 51, £252,107Edinburgh, 53, £240,978Glasgow, 56, £117,795Southend, 65, £249,141Portsmouth, 67, £190,579Derby, 69, £144,543Sheffield, 71, £148,551Brighton, 72, £342,959Norwich, 72, £190,883Nottingham, 74, £122,772Manchester, 77, £149,722Leicester, 79, £147,914Stoke-on-Trent, 79, £102,877Leeds, 80, £166,303Birmingham, 80, £159,732Plymouth, 80, £165,442Cardiff, 87, £189,419London, 89, £472,204Newcastle, 96, £154,477Belfast, 96, £118,894Hull, 98, £102,079Swansea, 100, £133,458Liverpool, 108, £119,933

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