Surveyors predict 6% house price rise in 2016
UK house prices are predicted to increase by 6% in 2016, according to a survey from the Royal Institution of Chartered Surveyors (RICS), as demand continues to outstrip supply.
The Government recently announced it plans to build 400,000 affordable homes by 2020, over half of which will be dedicated Starter Homes sold at a 20% discount to first-time buyers.
But RICS said that, while these initiatives are a positive step for housing, the build time for these homes would mean house prices and rents would continue to rise over the next 12 months.
Ultimately though, the focus on building homes for first-time buyers is predicted to have a cooling effect on the pace of growth, bringing it closer to the growth rate of household income, once the properties are actually built.
One of RICS’ main concerns is the government’s focus on homeownership at the expense of other tenures. It believes that that the swathe of measures taken by the government to curb investment in buy to let will put further upward pressure on rents, compounded by the shortage of social housing being provided by local authorities.
Jeremy Blackburn, RICS head of UK Policy, said that the Government needed to pay attention to the scarcity of private rented accomomdation too: “Ramping up housing supply is positive, but homeownership should not be the only game in town given the amount of private rented accommodation we need. A mix of market and rented housing is required and Starter Homes should not be seen as the panacea to solving the housing crisis, but as forming part of a larger mix to meet the wide range of housing need the country is crying out for.”
With house prices predicted to rise across the whole of the UK in 2016, East Anglia is continuing the trend seen in that region during 2015 with the highest predicted rise at 8%. Meanwhile, the North East is likely to see more modest price rises with a predicted increase for 2016 at 3%.