Strong December prices have pushed the annual increase up to almost £20,000 (7.4%).
Miles Shipside, Rightmove director and housing market analyst, commented:
“Whilst a fall is the norm at this time of year, this is December’s best post-financial-crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up. Although the average price of property coming to market is already up by a hefty 7.4% compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year.”
Rightmove predicts new seller asking prices to rise by 6% in 2016, despite increasingly stretched affordability and rising taxation of the buy-to-let sector. The imbalance of demand in excess of suitable supply has continued, with buyer enquiries jumping 37% since the start of October compared to the same period in 2014, and the number of properties coming to market down by 5%.
Shipside observes:
“Whilst initiatives are in place to encourage developers to build more new homes to supplement the supply of existing ones coming to market, the lead-times are long and developers face capacity constraints. In the meantime strong demand is being further fuelled by the additional momentum and aspiration for home-ownership that schemes such as Help to Buy create. We therefore predict that the average asking price will be another £17,000 higher by the end of 2016.”
Jeremy Duncombe, Director, Legal & General Mortgage Club, commented:
“November and December are months that typically see less demand in the market, resulting in lower house prices compared to other months. This nominal decrease in house prices from last month compared to the more severe drops we’ve seen in previous years is indicative of the scale of undersupply in today’s market. The housing crisis remains an ever burning issue in the UK, and is arguably one of the most critical problems currently facing the country.
“In order to address this issue, the Government must act to stimulate housebuilding whilst also encouraging and incentivizing existing homeowners to rightsize if they wish to do so. There are a significant number of families who are living in properties that fail to meet their needs, and introducing measures which help people to rightsize will promote a more fluid market. This will also encourage more efficient use of current housing stock, which will in turn, go a long way towards closing the gap between supply and demand and help in tackling the prevailing housing crisis.”
