U.K. property prices are expected to rise 14.2% in the next five years, according to a report out Monday from Knight Frank.

The prime market in England and Wales, specifically, will see price growth of 9.9% in the same time frame, the report found. And prime central London east will be the best performing region within the top-end of the market, with predicted price rises of 13.1% by 2022, Knight Frank said.

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In London overall, where prices have mostly been declining since around 2014, price growth is expected to hit 13% by 2022—though, prices are forecast to drop another 0.5% this year before the recovery begins, according to the London-based property consultants.  

A lack of inventory paired with high demand in some U.K. towns and cities will be one of the factors driving price growth, according to the report.

Though stamp duty remains a curb on activity across the U.K.—after changes to the property tax in 2014 and 2016 meant higher transaction costs for many purchasers—in prime central London, some parts of the market are moving into positive price growth for the first time in nearly two years, particularly in areas where lower asking prices more fully reflect higher stamp duty charges.  

Meanwhile, “the market’s political and economic mood music is a duet of Brexit and future interest rate rises,” according to the report.

Brexit will continue to create uncertainty in the short-term, and interest rate rises will push up the cost of mortgages over time. For now, the rates payable on home loans will remain near historic lows in the short to medium-term, according to the report.

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The predictions aren’t set in stone, though. Brexit and political instability are the two factors most likely to affect future housing prices, whether it’s an unfavorable deal exiting the European Union or prolonged uncertainty past 2019.  

This year, the prime market in England and Wales already has recorded moderate price growth. Average luxury prices rose 0.4% over the year to March 2018, according to separate Knight Frank reports published on Monday.

But prime markets in cities in the South West of England showed wide variations in price growth, the reports said.

“Urban markets in the South West continue to outperform, with Exeter, Bristol and Cheltenham all seeing higher annual price growth that the country average,” said Oliver Knight, research associate at Knight Frank in the report. But in Winchester, Oxford and Basingstoke—cities closer to London—prime prices fell.

“In a reversal of recent norms, the further you travel from London, the stronger price growth tends to be, with more muted pricing in the capital now being reflected in the surrounding markets,” Mr. Knight said in the report.

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