U.K. house prices will soar by 30 percent in the next five years according to a report by economic forecaster Oxford Economics and online real estate website Rightmove.
The forecast, which was published on Friday, shows growing regional variations in house prices. In the south of England, house prices should soar by a staggering 37 percent in the next five years. But the North West of England will be left lagging behind, with house prices jumping 24 percent.
"Understanding the path of future house price growth is a key element of U.K. economic strategy and decision making," said Mile Shipside, Rightmove director and housing market analyst.
The U.K. economy is currently outperforming its main European counterparts. Germany's economy contracted and France's economy stagnated in the second quarter of this year, according to the European Union's statistic office. Nonetheless, on Thursday Chancellor George Osborne told the BBC that the U.K. economy was not immune to a slowdown in the euro zone.
A slew of recent data has indicated that the U.K.'s previously "hot" property market is slowing down. Last month, data from British mortgage lender Nationwide showed house prices fell for the first time in over a year. In April, the British government introduced measures to cool the housing market, including tougher checks for mortgage approvals.
Property investors should prefer the south of England over London. During this period London house prices will grow four percent less than those in the south east of England, according to the forecast.
West London – which is home to some of the wealthiest districts such as Kensington and Chelsea – will see house prices rise just 14 percent. Conversely the biggest price increases will be within areas within commuting distance of the capital.
"Outer boroughs [are] set to benefit from the ripple effect of a year of strongly rising prices in London, alongside a brighter economic picture," the report said.
The sea-side towns of Southampton and Brighton should see house price increases of 43 percent and 41 percent respectively.