Chesterton Humberts 2014: Mainstream Strong But North v South Still The Story

Chesterton Humberts has beaten its agency competitors with a prediction of 8.2 per cent price growth in mainstream England and Wales in 2014 - more than Greater London and the most optimistic national forecast so far.

Over the course of the following four years there will be an average growth rate of six per cent in England and Wales, and a hefty 9.7 per cent average annual growth in Prime Central London.

Like many other agents’ forecasts, this is a story of the north-south divide with its five year forecast showing an enormous 48.5 per cent growth in prices in Prime Central London by 2018 but just 16.7 per cent growth in north east England.

Chesterton Humberts’ head of research - Nick Barnes, ex-Knight Frank - says the case for arguing that a housing bubble is being created has very little substance, especially outside of London.

“According to the Land Registry average national achieved house prices are currently rising at 3.4 per cent per annum. However, when taking into account consumer price inflation (2.2 per cent) growth in real terms is little more than one per cent - hardly bubble territory and skewed to some extent by London data” he insists.

Unlike many of the other agents which have made their predictions this month, Barnes’s big worry is not a mansion tax, nor the lull in transactions likely in the run-up to the 2015 General Election, but the possibility of heavy debt for home owners.

“The trigger for recent UK crashes has been fallout from economic recession which endangers household wealth and employment security and hits those with high debt exposure especially hard” he says.

“Outstanding household debt stood at £1.4 trillion at the end of September, 89 per cent of which was mortgage debt. A sharp rise in interest rates could compromise the finances of many households” Barnes warns.

He says fiscal measures may damage London’s future although an equal worry, he says, is the strength of Sterling improving as the UK economy improves, too, “which would make London property more expensive for overseas buyers”.

2014 Regional Forecast

England & Wales + 8.2 per cent
London + 8.1 per cent
Prime London +10.1 per cent
South east + 5.4 per cent
South west + 4.4 per cent
East Anglia + 4.7 per cent
West Midlands + 4.0 per cent
East Midlands + 4.3 per cent
North west + 4.0 per cent
North east + 3.4 per cent
Yorkshire & Humberside + 4.0 per cent

2014-2018 Regional Forecast

England & Wales +30.2 per cent
London +38.8 per cent
Prime London +48.5 per cent
South east +25.1 per cent
South west +21.2 per cent
East Anglia +22.3 per cent
West Midlands +19.2 per cent
East Midlands +20.6 per cent
North west +18.8 per cent
North east +16.7 per cent
Yorkshire & Humberside +19.1 per cent

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