House price predictions for 2016
In 2015 house prices have risen slowly but steadily across many parts of the UK.
As always, there have been pockets that have experienced rapid rises in property values, and those where prices have fallen.
A lack of supply has impacted on both sales volumes and property values this year, with the scarcity of property on the market pushing prices further upwards. This is expected to continue into 2016, despite Government attempts to boost supply.
But what else does the New Year have in store for property prices and will average values rise or fall over the course of the year?
Your Mortgage checked out the 2016 house price predictions from three experts:
Robert Gardner, Nationwide Building Society’s chief economist:
“As we look ahead to 2016, the risks are skewed towards a modest acceleration in house price growth, at least at the national level, despite the likelihood of interest rate increases from the middle of next year.
“Further healthy gains in employment and rising wages are likely to bolster buyer sentiment, while borrowing costs are expected to rise only gradually. However, the main concern is that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.
“Overall, we expect UK house prices to rise by 3-6% over the next twelve months.
“It remains an open question whether the striking divergence in regional house price performance, evident in recent years, will be maintained in 2016.
“Prices in the South of England, and especially in London, have been outpacing the rest of the UK by a wide margin. Indeed, prices in the South of England are now well above their pre-crisis levels while they remain below in Scotland, Wales and large parts of the North of England.”
Frazer Fearnhead, founder & CEO of The House Crowd:
“Following the pattern we’ve seen throughout this year, house prices continue to rise and look set to rise further well into 2016. In the three months to November house prices were 1.4% higher than in the previous three months, proving that bricks and mortar remain a solid investment option. This year’s Autumn Statement, however, demonstrated George Osborne’s plan to attempt to stop property being used as an investment vehicle for ordinary people.
“Osborne’s decisions appear to favour larger-scale house builders and institutions. Smaller scale landlords, hit by a continual barrage of legislation that creates more work and ever decreasing profits, will inevitably sell up in huge swathes leading to larger-scale landlords being able to purchase at reduced prices as supply exceeds demand.”
Stephanie McMahon, Strutt & Parker’s head of research:
“We predict that the strongest growth for 2015 will have been in the engine rooms of the South East (5.8%) and the East of England (7.1%), locations which benefit from their proximity to London and prime commuter catchments. Scotland is also showing good growth (5.8%) with renewed market vigour following last year’s referendum and May’s election.”
“The five year outlook sees these three regions having some of the strongest growth, although Greater London will strengthen again throughout the time period (19.8% 2015-2019 inclusive). The volumes in Prime Central London have shown a distinct slowdown over the past year, although we still anticipate price growth in 2015 (2.5%). Such a thin market shows much greater volatility and has no doubt been impacted by tax changes following a period of strong and sustained growth.”