West Midlands house prices to grow in 2018
A rise in West Midland’s house prices of around 4.8% is forecast for 2018, against a forecast rise of only 1.8% for the UK as a whole.
PwC’s latest Economic Outlook suggests that average house prices in the West Midlands will rise from £185,000 to £225,000 by 2022.
Matthew Hammond, chair of PwC’s Midlands region said: “The buoyant housing market reflects the strength of the West Midlands economy as a key growth area in the UK. We are seeing the region fast become a destination of choice for many businesses which is having a positive impact on the economic growth of the region and regional housing markets.”
PwC’s senior economist Richard Snook said:”UK house price growth remained resilient in 2017 despite a weakening economic backdrop, but has shown signs of moderating during the fist half of 2018, particularly in London. ”
House price rises have traditionally been caused by a number of factors, and one of these is the lack of supply of new houses. According to the PwC report, at the local authority level across England, there is a clear link between a lack of new housing supply, relative to population growth, and local house price growth since 2011.
Snook added:”Local targets need to be set and met for house building, linked to supporting infrastructure development, as well as national targets. Building new homes in the wrong places will only perpetuate England’s housing supply problems.”
Hammond went on to say:”Whilst strong house prices are good news for many, we must continue to build much needed homes across a range of housing tenures to make sure the market remains open to those who are not yet on the housing ladder.”
On the question of a potential rise in interest rates sometime this year, Snook said that the Bank of England’s Monetary Policy Committee should not be “overly concerned about small rate rises causing significant short term economic damage given that only around 11% of UK households would be immediately affected by any rise in mortgage rates.”
