Home prices across the UK could rise by eight per cent or more next year unless a flood of new properties is unleashed onto the market, states Rightmove, a leading property website.
According to Rightmove’s housing forecast, asking prices throughout England and Wales will increase by six to eight per cent in 2018 as the number of available properties continues to dwindle, squeezing the already low housing supply even further.
Miles Shipside, housing market analyst and Rightmove director, said, “There’s a listing gap to fill. While sales transactions are up 13% so far in 2018, the number of newly listed properties is only up by 2%.” Rightmove estimates this was the primary reason for the 5.4 per cent increase in asking prices in 2018.
The property website’s latest monthly housing market report shows the average December asking price is currently £241,455. Although prices are down slightly compared to November, this simply reflects the typical December slowdown, and this year’s December slowdown marks the lowest fall since 2006.
The Rightmove website, which advertises approximately 90 per cent of all homes sold by estate agents throughout the UK, states that local price movement variations will continue in 2018.
The website predicts that some cities and towns will witness larger price gains than surrounding regions, a pattern that was evident this year as prosperous housing markets in southern hotspots like Cambridge, Bristol, Bath, and Oxford drove up regional averages.
According to Rightmove, cities such as Manchester, Leeds, and York will be 2018’s northern hotspots, but prices in different areas will increase at various rates.
Rightmove also predicts London housing prices will increase by an additional six per cent next year, and thanks to the “London ripple effect,” home prices in the southeast may rise by as much as 10 per cent as well.
“As the momentum of recovery increases, areas with the largest shortages of fresh property supply are likely to see more substantial price rises, with the south-east among the regions where listings are most scarce,” stated Shipside.
Playing down the concerns of policymakers and economists regarding the Help to Buy scheme’s potential role in causing the next property bubble, he continued, “With Help to Buy encouraging more lenders to offer mortgages to those with 5% deposit, the scheme appears to have had a successful start in creating the framework for a return to a normal, functioning higher loan-to-value mortgage market.”