Continued growth forecast for house prices in 2016

December 10, 2015 by Brendan

House Prices

The first forecast for house prices next year has been completed, and it predicts that the pace of increase will slow down but will still be ahead of wages growth.

According to the Guardian, the Halifax has predicted that property prices will continue to increase steadily next year, despite many indexes already reporting record levels. Growth has been estimated by the bank to reach around four to six per cent, which is lower than growth for the last year, 9.7%, but is still a steady rate. However, as wages have only increased by an average of 2.9%, affordability could become a problem for many.

The Halifax has cited the lack of housing supply as the reason for house prices continuing to climb steadily. The bank states that this may be due to fewer people moving for a second time, as they believe they may not be able to afford a suitable property, or just can’t afford to upgrade to a better home. Experts believe that demand for housing will diminish as interest rates start to increase, meaning that higher stamp duty rates and issues with affordability become a problem.

During the Autumn Statement, the Chancellor pledged that 400,000 new affordable homes will be built during the next four years, along with a promise to provide help for those seeking to buy a property. Affordability can be a problem as lenders issue stricter criteria. A mortgage adviser with appropriate training and experience, including CeMAP training, will be able to advise borrowers about affordability.