House prices in the south west are expected to grow by 13.1% over the next five years – with coastal areas seeing the strongest increases, according to new research by Savills.
The predicted figures show that the average cost of a home in the region will rise from the current average of £341,971 to £386,769 by 2026.
The forecast for the south west is exactly in line with that of the UK average, which will see the cost of a home in the UK increase from an average of £327,838 to £370,785 by 2026.
The price of a home at the higher end of the market, known as the prime market – broadly the top 5-10% by value – will increase by an average of 19.3% over the five-year period outside of London.
In both the mainstream and prime markets, the strongest growth will be seen in 2022, with prices expected to increase by 3.5% on average in the mainstream market, and by 4% at the higher end.
Chris Clifford is head of residential sales at Savills Cornwall. He said that while there may be less urgency in the market next year, demand for property in popular towns and villages looks set to continue.
“After such an intense period activity and growth in the market, and without the imperative of a stamp duty holiday, we know there is likely to be less urgency from 2022,” he said. “As a result, and coupled with the first anticipated interest rate rise, our researchers are expecting growth to return to more ‘normal’ levels from next year.
“Demand for property for sale in Cornwall remains incredibly strong and the comparative lack of supply, coupled with historically low interest rates and a robust economy, means that while price increases will start to soften, they are very unlikely to fall.
“The prime coastal markets in Cornwall, which have experienced a huge gap in supply and demand resulting in average annual growth of 14.8%, are likely to see the strongest growth in the coming years, and this could well exceed the county average of 4%. This is partly down to the rise in hybrid working, as a result of the pandemic, but also the lifestyle and wellbeing influences which are becoming an increasing factor of buyers decision making.”