Residential property prices in some locations in the United Kingdom could increase by as much as eight per cent in 2016 as the recovery that has taken hold in London ripples out across the country.
But overall price growth is expected to be around six per cent across the country during the year, according to the forecast from the Royal Institution of Chartered Surveyors.
Propertywire.com, reports that one location tipped to see strong growth is Cambridge because of its buoyant jobs market and good commuter links to London.
However, the RICS report also suggested that the current shortages of supply in the market are set to continue and this will push up prices with this growth likely to outstrip any rises in household income.
According to RICS surveyors the average number of properties for sale have fallen to a record low of 46 and 40 per cent of chartered surveyors believe that it is this lack of stock which is the main reason sellers are not entering the market, leading to a vicious circle.
After East Anglia, the strongest growth is expected to be in the South East and the West Midlands, where seven per cent rises are forecast. The lowest level of increase is forecast for the North East of England where prices are forecast to rise by a much lower three per cent.
Areas with the highest number of transactions are likely to be the North East, Wales, Scotland and Northern Ireland, where prices remain low relative to the rest of the UK.READ ALSO – The Pros and Cons of Selling Your Property This Christmas Season
RICS chief economist, Simon Rubinsohn, explained that an interest rate rise of 0.25 per cent has been taken into account when making the forecast but he does not expect there to be a big rise in mortgage rates.
He added, “Housing has clearly leapt up the government’s agenda, but despite the raft of initiatives announced over the past year the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months.
“Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being. Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership at the expense of other tenures.”