British property portal Home.co.uk is predicting further price rises this year as available housing stock continues to fall.
House prices, is says, are set to continue rising during 2016 due to a lack of available housing stock in the property market. Latest figures from Home.co.uk’s December Asking Price Index showed there are 47 percent fewer properties for sale now than in December 2007.
This month, there were just 405,278 properties on the market in England and Wales, down 16.1 percent on December 2014’s figure of 483,224. This, it said, is creating a vicious circle of price hikes that are set to continue throughout 2016, and will follow a rise of 8 percent in England and Wales’ property prices in 2015.
Already, regions with the biggest shortages of available housing for sale are experiencing the quickest price rises, with the East of England in particular set for continued rapid price hikes next year. Between November 2010 and November 2015, the supply of property in the East slumped by 27 percent, while prices in the region rocketed by 10.6 percent over 2015.
Scotland’s housing supply fell by 13 percent between November 2010 and November 2015. Other areas where the supply of properties for sale dried up over the same period include the East Midlands, which saw a fall of 12 percent, and the West Midlands where supply dropped by 11 percent. The South East is another region to experience a drought in the volume of property for sale with supply falling 10 percent over the same period.
Only two areas saw an increase in housing stock for sale between November 2010 and November 2015; Yorkshire and the Humber where supply increased by 10 percent, and Wales which saw a 2 percent rise.
For 2016 Home.co.uk is predicting a similar range of regional price rises as seen in 2015. However, due to further contractions in supply the East of England and the South East are expected to outperform Greater London during the next 12 months.
Property buyers in Scotland, the West and East Midlands, and the South West are advised to brace themselves for a year of rapid price growth as the supply crisis ripples out to these regions.
Meanwhile, typical time on the market has also fallen due to this imbalance between high demand and low supply. In England and Wales, the typical time on the market in December this year was 104 days compared with 110 days a year ago.
Home.co.uk Director Doug Shephard said: “Next year is set to see the vicious circle of spiralling prices and falling supply deepen even further as buyers take advantage of cheap credit to chase ever fewer properties.
“The low interest rates that have allowed the UK government to service extraordinary debt levels and fuelled an artificial house price boom look set to stay.”
