Will house prices continue rising in 2017?
12-24-2016
Over the past year the value of UK homes have risen by £57 a day, but can this continue into next year?
According to the Royal Institution of Chartered Surveyors (RICS) it almost certainly will. It predicts house prices will continue rising in 2017 but growth is set to slow to 3 per cent, according to a new report.
The forecast from RICS shows a marked slowdown on house price growth this year, which it says is on course to end 2016 at about 6.5 per cent.
A chronic shortage of supply will also see transactions drop to between 1.15 million and 1.2 million from about 1.25 million in 2016, the report shows.
But first-time buyers will continue to struggle to get on to the property ladder as the predicted 3 per cent rise in prices continues to leave home ownership out of reach for many.
In October Bristol saw new buyer enquiries increased for the first time since February – up by 8 per cent.
RICS also believes rent will go up by 2 per cent to 3 per cent across the UK in 2017.
Simon Rubinsohn, RICS chief economist, said: “Although recent announcements by the Government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents.
“As a result, the affordability challenge will remain very much to the fore for many."
Bristol and Bath estate agent Stephen Morris, of Davies & Way, told the RICs report that the market in Bristol “remains resilient except in the higher price ranges, of £1m+ where buyers are more cautious."
RICS predicts that East Anglia, the North West and West Midlands will see gains above the national average during 2017.
Prices in Central London will stabilise after a tough 2016 as the plunge in the pound's value since the Brexit vote sparks a buying spree by foreign investors, RICS adds.
Britain's housing market has been affected this year by changes to stamp duty, which has made the tax more expensive for some people buying top-end homes, while it was increased in April for buy-to-let investors.
This is thought to have affected the London market in particular.
RICS said 2017 would see more major changes, with the Housing White Paper set to be a “defining moment" in January, as well as the proposed ban on letting agent fees.
Jeremy Blackburn, head of policy at RICS, said: “The unintended consequences of such a blunt policy will also be a strong feature of the year ahead."
Homes across Britain have added around £57 to their value on average each day during this year, according to a property website.
Zoopla said the average home has piled £19,348 onto its value from January to early December - equating to an increase of £56.57 per day typically.
The website said property values in England have seen the biggest increase, rising by 7.59 per cent to an average of £325,575 since January. In the wider Bristol region house prices have risen by 7.88 per cent to an average of £297,054.
Across Britain as a whole, the average house price now stands at around £308,790.