London house prices are set to boom over the next five years, estate agent Savills said as it upped its UK property market forecasts for 2021.
House prices in London’s mainstream market are expected to rise 12.6 per cent in the five years ended 2025, the real estate firm said.
Meanwhile prime central London house prices are rated a “buy” as they are down 21 per cent from peak, and are expected to “rebound strongly”.
Prime central London prices will rise three per cent this year, seven per cent next year and total 21.6 per cent by 2025.
Savills upgraded its UK house price forecasts for this year to growth of four per cent, compared to its previous expectation that property values would remain flat in 2021.
Over the five years to the end of 2025, it anticipates UK-wide house price growth with total 21.1 per cent.
Housing transactions are expected to reach highs of 1.4m this year before falling back to pre-Covid levels in 2023.
However, markets furthest from the capital are expected to see the strongest growth, with the north west and Yorkshire and The Humber leading the way.
“2021 is going to be a complex and uneven year, with competing forces impacting the housing market at different points,” Lucian Cook, Savills head of residential research, said.
“But the outlook has improved since the beginning of the year given the speed of the vaccination programme, the expected relaxation of social distancing measures and government support for both jobs and the housing market.