House prices in England and Wales forecast to end the year up 5.0 per cent and by 4.5 per cent in 2016.
- Average house prices in England and Wales are expected to rise by 5.0 per cent in 2015 and by 4.5 per cent in 2016
- Across London prices will continue to rise, but at a slower pace. In 2015 prices in Greater London are set to grow by 6.0 per cent outperforming central London where prices are expected to rise by 3.5 per cent
- In prime central London prices are expected to end the year up 1.0 per cent as the market adjusts from the strong growth seen in 2014 and as the strength of sterling impacts overseas buyers.
- In the South and East price growth has eased on 2014. We expect prices in the SE to rise by 6.5 per cent in 2015 and by 4.5 per cent in the SW.
- Northern regions of the country are still catching up, but weaker economic conditions in these regions will constrain the pace of price growth. In 2015 we expect prices in the North East to rise by 2.5 per cent and by 3.00 per cent in Yorkshire & Humberside. The North West stands out as the best performing region with price growth of 4.50 per cent over 2015
Hamptons International announced today that average house prices in England and Wales are expected to end the year up 5.0 per cent, with growth slowing to 4.5 per cent in 2016. In its updated forecast, the leading residential agent said that against an improving economic background, house prices will continue to grow but that the pace of growth over the next two years will remain subdued. Affordability constraints, together with a moderating of price expectations for both buyers and sellers mean that house price growth is likely to remain in single digits over the coming two years.
London’s house price growth is expected to slow, but remain positive, with prices outside of the prime central markets stronger than inside them. Beyond London and the South, the North West stands out as a region that is expected to outperform its neighbours as confidence in its local economy and future prospects grow.
Despite the change in stamp duty, housing market activity over the year has been disappointing. There were 15 per cent fewer homes for sale in the first half of 2015 than the same period in 2014 as sellers were reluctant to come to market. This said, a lack of housing stock continues to act as a support to prices.
Looking ahead to 2016, interest rates continue to be the big unknown. It seems most likely that rates won’t move until Q2 2016 and that when they do rise they will settle at a new level of around 2.5 to 3 per cent.
Commenting on the figures Fionnuala Earley Residential Research Director at Hamptons International said
“The outlook for the housing market recovery is modest, with price growth across the country likely to be in single digits. Economic conditions are improving, but there are still constraints on affordability even though wages are beginning to rise. A lack of stock for sale will continue to support prices in the shorter term, but this should ease as we move into 2016. Price growth will slow in London, the South East and East, but will continue to catch up elsewhere as the economic recovery spreads out.
“There are up and downside risks to the housing market, from global uncertainties and the timing of interest rate rises and the future availability of both new and existing stock. The most likely outcome is that rates will stay put until Q2 2016 which should help calm worries and allow the modest housing market recovery to continue to take hold.”
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About Hamptons International
Hamptons International is a leading residential estate agent and property services organisation, operating in London and the South of the UK. With more than 140 years of experience in the property market and a commitment to industry innovation and exceptional levels of customer service, Hamptons International today offers a wealth of award-winning services including UK and international Sales, Lettings, Property Management, Corporate Services, Residential Development, Development Land, Valuation and Property Finance.
With headquarters in London’s West End, Hamptons International has an international network of more than 87 offices and is a subsidiary of Countrywide, the UK’s largest estate agency and property services group.