14th December 2015
Asking prices for the average home could be £17,000 higher by the end of 2016, property website Rightmove.co.uk has urged.
The group asserted that despite any seasonal dip upward price pressures are expected to continue well into next year.
Miles Shipside, Rightmove director and housing market analyst said: “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’s 2016 forecast is for new seller asking prices to rise by 6%.
Its analysis of email enquiries sent by potential buyers to estate agents since the start of October this year shows a jump of 37% compared to the same period in 2014. In contrast to this surge in demand, the number of properties coming to market has fallen by 5% over the same period.
Shipside added: “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.”
Rightmove predicts that outer London prices will rise by circa 6% in 2016, so looking further north and west may seem increasingly attractive.
Analysis of Rightmove data by Dr Alasdair Rae, of the University of Sheffield, suggested that the market may see an exodus of highly-skilled workers leaving the capital for more affordable cities such as Leeds, Edinburgh, Cardiff and Manchester.
Dr Rae said: “2016 may be the year when many young urban professionals finally give up on the London market and consider long-term career moves to the UK’s large, buoyant city-regions, such as Manchester, Leeds, Cardiff and Edinburgh. They are already very popular and pricey because of what they offer, but may seem cheap to London émigrés priced out of the capital.”