In an optimistic report from Halifax, the housing market is due to see continued growth in the next year. What was expected for the end of 2016 and into 2017 following the Brexit vote was a doom and gloom forecast for falling house prices. Instead, growth continued as hopeful home buyers stayed focus and showed confidence in both the UK economy in the long term and confidence in their own future. Now, a major forecast has issued good news for a year in which much change is expected.

The Halifax forecast may not be overly cheerful, for it still points to a slowdown in the economy and declines in the housing market in London, but overall growth next year is expected between 1% and 4%.

Martin Ellis, housing economist with Halifax, remarked, “House prices in relation to average earnings are at an historical high in the capital; at nine times annual average earnings. Additionally, mortgage affordability in London is worse than its long run average ... price growth will slow more sharply in London than elsewhere during 2017. There is a risk of some price falls in parts of London, particularly in the most expensive central locations, in 2017.”

The reason that despite possible hardships from the economy the housing market will see continued growth is due to the expectation that borrowers will still be keen on seeking a mortgage, even if interest rates rise. Since interest rates should rise slowly if they happen to do so, the rates will still be quite attractive and still within historical levels not seen in decades prior.

If a gain of 1% to 4% does occur, then the average house price next year will be between £220,000 and £226,000. The current house price is £218,000.