With interest rates continuing to normalise, mortgage rates will reach 3.6% by 2020. Combined with the fact that prices are already very high, that will offset the effect of accelerating wage growth, and keep house price inflation below 2% each year to 2020. Growth in transactions will also be modest. That said, with prices in London exceptionally high, and signs that homes there are struggling to sell, we expect prices in the capital to fall by 8% over the next two years.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services