You are here: Home - News -

House prices expected to rise by 6% in 2016

by:
  • 14/12/2015
  • 0
House prices expected to rise by 6% in 2016
Average house prices are expected to rise 6% by the end of 2016 after a strong finish to the year which saw December asking prices take their lowest dip since 2006.

After a monthly price fall of 1.1% in December, the annual price increase stood at 7.4%, figures from Rightmove’s December House Price Index show.

Asking prices in 2016 are now expected to rise by 6%, fuelled by strong demand and the momentum and aspiration for homeownership that schemes like Help to Buy create. This will also be pushed up by a 5% dip in available homes, despite buyer enquiries to agents rising by 37% since the beginning of October.

Leeds has 3,500 properties for sale, a 30% decline compared to the market norm despite a surge in buyers and tenants.

Outer London prices will rise by an estimated 6% next year, which could see many highly-skilled workers leave the capital for more affordable cities like Leeds, Edinburgh, Cardiff and Manchester. London is expected to be hit the hardest by the Stamp Duty Land Tax (SDLT) changes introduced from April next year as 15% of buyers there are landlords.

From April 2016, property buyers purchasing a second home or buy-to-let property will face a 3% premium on top of their usual SDLT bill.

However, the ripple effect will not reach all towns and cities, particularly those that cannot offer easy access to amenities. Continued stagnation or price falls are likely in less sought-after areas in the north and west of the country, particularly if buy-to-let activity tails off.

Those looking to expand their property portfolios will most likely be trying hard to beat the SDLT surcharge deadline, industry experts said. While rents are forecast to rise in popular locations to improve landlords’ returns, some of the increases in capital values may be dented in the sector once the changes go through.

Those looking to sell for the first time now may be best advised to wait to take advantage of any surge in investor activity which is expected to happen before SDLT changes next April , said Miles Shipside, Rightmove director and housing market analyst.

First-time buyers may find delaying their purchase until closer to the April deadline, when it will be too late for landlords to squeeze through last minute investment purchases before the 3% hike.

Shipside said: “If a buy-to-let investor wants to buy the same property as a first-time buyer, their purchase costs are going to be 3% higher if they do so post-April. That may mean their returns will not stack up to make it attractive, and they will potentially be at a disadvantage compared to would-be owner-occupiers looking to get onto the property ladder.

“Prices may therefore have a period in the relative doldrums in this lower-priced sector, until the dust has settled. However, demand among fellow first-time buyers remains strong so waiting for prices to fall could be just wishful thinking. A lot depends on the dynamics of your local property market so doing your local research is very important as always.”

There are 0 Comment(s)

You may also be interested in