(Bloomberg) -- The U.K.’s pandemic-defying housing boom could have some way to go yet.
That’s according to a revised forecast from broker Savills Plc which now predicts 9% price growth this year, up from an earlier estimate of 4%, thanks to the extension of a tax holiday. It still expects values to rise by 21.5% over the next five years, in line with previous forecasts, as price inflation eases following the removal of incentives.
Wealthy U.K. home owners have been bidding up prices as they look for properties with more space and greenery following months of lockdowns. Historic low mortgage rates have helped fuel the surge, even as first-time buyers struggle to get onto the housing ladder due to more lenders insisting on higher deposits.
The search for space drove prices up 7.3% in the year through June, compared with just a 1.4% increase for apartments, according to separate research published by Zoopla Tuesday. The property website sees annual price growth peaking at about 6% before the stamp duty holiday unwinds at the end of September, and then moderating to 4%-5% by the end of the year.
To be sure, the Savills upgrade is the latest in a series of rosy housing market forecasts by U.K. brokers who have consistently predicted robust growth over the past five years. Savills said that central London prices would rise by 21% in the five-years from 2017, a period that has been marked by flat and falling prices in the capital’s inner districts.
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