Many estate agents are hailing a property boom in the wake of the decisive Tory election victory. But market analysts do not agree.

So what will happen to house prices and the property market in 2020?

House prices in the north of England and the Midlands are set to flourish in the New Year as companies slowly look to move their businesses to cities outside of the capital.

First-time buyers have had a good 2019, with low prices and interest rates, but the good fortune isn’t expected to continue into 2020.

Affordability is predicted to squeeze those trying to get on the property ladder if house prices and interest rates rise.

Of course no-one can predict the future, but here’s what experts reckon you can expect from the housing market next year.

London

Everyone predicts lower growth in the capital than in the rest of the country.

Homeowners will choose to improve instead of move.

The UK is now expected to leave the EU by the end of January 2020.

This uncertainty has meant many people have stayed in their homes rather than sell-up.

Changes in regulation earlier this year means homeowners can now build a single storey extension without planning permission.

And homeowners are expected to spend a collective £5.5billion on improving existing homes in the next 12 months.

The issue with homeowners opting to extend their houses instead of sticking them up for sale means there will be a shortage of larger homes on the market.

The new-build sector is also set for change in the year ahead. The market stagnation in 2019 has meant that many developers have stopped building. 

New developments take time to build so there will be a lag, but over the next two years there will be less new stock in London and the South East .

The rest of the UK
The North is the one to watch.
Its housing cycle is well behind London’s, so there’s still substantial opportunity for price growth.
The most affordable regional cities will record the highest price growth, at 4 per cent over 2020.

Plus, prime minister Boris Johnson has pledged to spend billions in infrastructure here, in his bid to maintain the votes the Tories won from the “red wall”.
Manchester, Liverpool, Sheffield, Leeds and Nottingham are all “likely to have a good year”.

And though housebuilding has slowed nationally, there are pockets that will see “a large concentration of new completions from next year onwards” and they are primarily in the North.

Manchester ranks top, while Leeds and County Durham follow close behind.

The North West as the region where property will see the greatest capital appreciation over the next five years

Northern Ireland and Scotland have shown strong price resilience, which should be set to continue through 2020, but things could change fast for both of their economic markets, depending on Brexit negotiations and the likelihood of another Scottish independence referendum.

Scotland, which has so far utterly bucked the UK-wide price growth slowdown, could lose its immunity in 2020.

Until now, Edinburgh has been counter-cyclical in relation to London with its high-paced growth occurring at times when the capital’s market has been at its weakest. 

But it’s also a city that generally has a three-year lag time on the patterns in the London market, and the capital’s downturn started in around 2016.

Private rental market

Rent growth is due to outstrip price growth in the coming year.

The economists predict jumps of 2.5 per cent nationally, and by 3 per cent in London. Over the next four years they predicts jumps of 10 per cent and 15 per cent in national mainstream and London mainstream rents respectively.

Rental stock is low as many landlords have been selling up in the wake of the phased tax reductions on buy-to-let mortgages, the final stage of which will come into effect later in 2020.

But …… There is a risk of “runaway rents” unless reforms are introduced.

What help is out there for first-time buyers?

GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.

Help to Buy equity loan – The government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property. You can no longer open a new account, but existing account holders have until December 1 2030 to claim the bonus.

Lifetime Isa – This is another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the government will add 25 per cent on top.

Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you’re restricted to specific ones.

“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.

Starter Home Initiative – A government scheme that was supposed to see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.