Housing market drivers
Many factors will determine the path and strength of the UK housing market over the next five years. We highlight the key influences which range from a strong and relatively stable domestic economy to problems in China and possible contagion through to affordability and borrowing constraints and Government initiatives.
Fundamentally, however, we believe that a strong UK economy will prove the solid bedrock from which the housing market can move forward. Improved employment and wage conditions, together with a more prosperous and secure outlook, will instil greater confidence in household finances. This will lead to more people buying their first home as well as encouraging existing homeowners to move up the property ladder.
There will be headwinds, with affordability proving a dampening influence on both price growth and transactions, while China and emerging country problems provide an external threat to the otherwise steady UK economic prognosis.