Estate agents Savills warns current UK house price growth is unsustainable

 
Helen Cahill
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Country On The Brink of Recession According To Business Leaders
Wage growth has not been keeping pace with house price inflation in the UK (Source: Getty)

Estate agents Savills has warned that the current rate of house price growth is not sustainable in the UK as inflation and stagnating wages pile pressure on consumers.

In February, house prices increased 0.6 per cent month-on-month, according to Nationwide's house price index, and since 2014, price growth has averaged 0.4 per cent, but Savills has warned that it is "unlikely" that prices will remain on that trajectory this year.

Read more: Ranked: House price growth in every London borough this year

This year, house prices are likely to fall in six of the 11 regions analysed by Savills. The research found that in Scotland and the North East, prices could fall by 2.5 per cent, and in Wales, the North West, and Yorkshire, house prices could fall by two per cent.

The most impressive growth in house prices will be in the South East and the East of England, where Savills expects prices to grow by two per cent and 2.5 per cent respectively. In London, house prices are forecast to stay flat this year.

Read more: The Chelsea house price plunge: here's how low prices will go

"The strongest growth is still focussed around London, with Slough, Newham and Thurrock the top three authorities in terms of annual house price growth," the report said of housing market trends in 2016. "Kensington and Chelsea saw the only annual price fall in England over the same period."

If current trends in Kensington and Chelsea continue this year, the average house price in the area could drop by as much as £75,000.

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