Knight Frank says house prices may not return to peak till 2019

Ben Southwood
Follow Ben
THE DOWNWARD correction to house prices gathered pace in October, according to data out yesterday, while one estate agent today predicted prices would not reach their pre-recession peak until 2019.

The UK’s average house price slid 0.7 per cent into October, according to the Halifax house price index, meaning prices are some 1.7 per cent lower than a year earlier.

This makes October the fourth consecutive month of monthly decline, a slide which Halifax puts down to a weak overall economy.

And the market may not fully recover until 2019, Knight Frank said this morning, with average prices falling two per cent across 2012 and still sliding through 2013.

Even prime central London – so far performing strongly despite recession – will register no growth during 2013, Knight Frank predicts, due to tax changes.

“The demand for luxury London homes from overseas buyers...has helped drive price increases,” said Liam Bailey at Knight Frank, “this growth might have continued into next year...but government policy is set to...impact on the market next year. In March, George Osborne raised the stamp duty charge for purchases of homes worth more than £2m to seven per cent, up from five per cent,” Liam Bailey said, noting that sales up to £2m have already fallen a quarter.