London is set to underperform the rest of the country on house price growth until 2024, when growth will accelerate.
Prices in the city have been forecast to end the year up 1.5 per cent, according to the latest housing market forecast from estate agents Hamptons.
London prices are then predicted to rise by one per cent in 2022 then 1.5 per cent 2023, before accelerating to three per cent in 2024.
House price growth is expected to slow in the autumn and winter, finishing the year at 4.5 per cent across the UK, after pent up lockdown demand cools down.
However, a second wave of lockdown-induced demand will ensure price growth remains in positive territory at 3.5 per cent in 2022, three per cent in 2023 and 2.5 per cent in 2024.
“The pandemic has accelerated the closing of the house price gap between London and the rest of the country. Even so, we still expect London to underperform the rest of the country until 2024, when the cycle is likely to end,” Aneisha Beveridge, head of research at Hamptons said.
She added: “While we will see a degree of levelling up over the next few years, the gap between house prices in the capital and the other regions is likely to be wider than that seen at the end of the previous cycle in 2007. And this divergence will set the pattern for future performance.”
The North East is set to enjoy plentiful house price growth with a rise of 21.5 per cent expected in the last quarter of 2024, well ahead of the UK average of 13.5 per cent.
More homes will have sold in 2021 than any year since 2007, the estate agent predicted, estimating 1.4m completions in the UK.
Many people made the decision to move homes thanks to remote working or changes in employment.
“People now place a higher value on their homes, having spent more time in them than ever before. Flexible and remote working, which look set to continue, have encouraged households to make bigger moves,” Beveridge added.