In contrast to the many negative outlooks for the housing market after the EU referendum, the Centre for Economics and Business Research (CEBR) gave their own expectations for the coming years. They forecasted a slowing down of the raging increases to property values for the rest of the year and next. However, the years following are expected to reflect an emerging renewed strength in the housing market.

According to CEBR property values are due to be worth £40,000 more by 2021. That would push the current average house price in the UK from £194,000 to £234,000.

By the end of the year the UK house prices are due to have increased by 5.7% from 2015. This is a decline from the forecast earlier in the year for an increase of 8%.

The first part of the year got a boost due to the stamp duty increase that was imposed upon second home buyers, including landlords. Since the increase was to go into effect on April 1, the first four months of the year reflected the rush by buyers to save.

The main area of the housing market that is showing a slowdown is the top end section of available properties, especially in London. Investors have been frightened away, but could come back in a rush as the economy settles from the Brexit vote. London prices are forecasted to decline in 2017 by 5.6%.

Nina Skero, senior economist of CEBR commented, “Although Brexit has certainly sent shockwaves, CEBR expects the housing market to slow down, but not plummet.

“Years of underbuilding mean that demand would have to fall very dramatically to meet the low level of supply increases. Keeping in mind that construction companies are very likely to limit their output further in light of Brexit, price pressures will also come from the supply side.”