THE UK’s economic growth will have the biggest influence on house prices over the next five years, according to new research.
The survey of small- and medium-sized enterprises (SMEs) in the housebuilding sector, published by specialist mortgage lender LendInvest, showed that 40 per cent of respondents view national economic growth as likely to have the greatest impact on house prices.
In contrast only 24 per cent of respondents believe political developments, such as further elections and impending Brexit, will affect house price growth the most.
“It is great to see that the next generation of SME housebuilders are so confident about prospects for the housing market in the medium term,” Steve Larkin, director of development at LendInvest, said.
Read more: LendInvest unveils second retail bond
“Typically, we might expect to see more scepticism or concern surrounding the impact of Brexit on the market.
“Likewise, shortage of supply is the conventional culprit for pushing house prices up.”
However, a shortage in supply of housing was the biggest concern affecting house prices for only 20 per cent of those surveyed.
Additionally, 16 per cent of respondents cited the construction of new infrastructure such as the new HS2 and Crossrail lines as the key influencing factor for prices.
“Naturally we must wait to see how the economic and political developments of the next year or two unfold,” Larkin said.
“But for now, it’s encouraging to see these aspiring developers taking such a fresh perspective on the market they’re entering.”