UK property prices to boom in 2016?

UK property prices to boom in 2016?

Property asking prices experienced the smallest seasonal dip in years, leading experts to believe prices will accelerate over the next 12 months.

Summary:

  • Property prices across England and Wales experienced the lowest seasonal dip in the past four years
  • The demand for property and continued low interest rates lead experts to expect even higher prices in 2016
  • In October the average property took only 66 days to sell, 3 days fewer than the same time last year

Property asking prices across England and Wales are up 6.2% year-on-year and have experienced their smallest seasonal dip for four years.

Sellers who enter the market in the Christmas run-up traditionally set lower asking prices as buyers are harder to attract during the festive season. However, this November’s price dip of 1.3%, or £3,977, is much less than usual.

It is the smallest dip in new seller prices during the seasonal slowdown since November 2011, according to a Rightmove report.  The report expects this to be indicative of even higher prices in 2016.

With the likelihood that demand will continue to outstrip supply, prices look set to increase in multiple locations next year, and the seasonal dip to be short-lived.

Miles Shipside, Director and Housing Market Analyst at Rightmove, said: “Buoyant market conditions and a confident outlook for 2016 mean that the reduction, while no-doubt welcome to hard-pressed buyers, is the most Scrooge-like since 2011. It’s likely to be a short-lived respite as the combination of high confidence and low interest rates is a recipe for higher prices next year. Long term low interest rates are typically a trigger for activity and price rises in the property market while other parts of the economy are less susceptible to such an incentive.”

Demand in the UK property market has been particularly strong in 2015 and this is expected to continue. The average number of days a property took to sell at 66 days in October, compared to 69 days at the same time last year.

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