UK residential property prices unlikely to keep up with inflation in next 12 months: analysts

PROPERTY prices in London and the rest of the UK are not likely to keep up with the pace of general inflation over the next 12 months, said analysts.

But while property prices are expected to fall over the next year, observers say a major price slump in nominal terms is unlikely, as there continues to be an acute shortage of houses and apartments, especially quality properties.

Real estate agents including Savills and Knight Frank are forecasting a 5 per cent to 10 per cent price appreciation for both prime central London and the outlying areas for the whole of 2022. Both firms agree that economic headwinds, notably the higher cost of living and rising mortgage rates, are likely to crimp nominal price growth heading in 2023.