Taylor Scott International News
The UK residential property market has experienced its lowest property price dip for the end of the year since 2006, according to the latest index figures. Traditionally prices fall off in the run up to the festive season but the data from Rightmove shows that asking prices fell 1.1% in December and it is forecasting price growth of 6% for 2016. It says that increasingly stretched affordability and extra stamp duty on the buy to let sector will be outweighed by stark imbalance between supply and demand. Indeed, buyer enquiries to agents since the beginning of October this year are up 37% but the number of properties coming to market was down 5% compared to the same period in 2014. Looking ahead demand is expected to increase further in more affordable cities such as Leeds, Edinburgh, Cardiff and Manchester as highly skilled workers may choose to leave London for buoyant city regions. The lower than expected fall in prices mean that the annual increase is almost £20,000 or 7.4%, taking the average asking price to £289,452. ‘Whilst a fall is the norm at this time of year, this is December’s best post financial crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Although the average price of property coming to market is already up by a hefty 7.4% compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year,’ he added. He explained that whilst initiatives are in place to encourage developers to build more new homes to supplement the supply of existing ones coming to market, the lead times are long and developers face capacity constraints. ‘In the meantime strong demand is being further fuelled by the additional momentum and aspiration for home-ownership that schemes such as Help to Buy create. We therefore predict that the average asking price will be another £17,000 higher by the end of 2016,’ said shipside. An analysis of Rightmove data by Dr Alasdair Rae, of the University of Sheffield, suggests that there could be an exodus of highly skilled workers leaving London for more affordable yet vibrant cities such as Leeds, Edinburgh, Cardiff and Manchester. But this ripple effect won't reach all towns and cities and continued stagnation or price falls are likely in less sought after areas in the north and west of the country, especially if buy to let investor activity tails off. Rae suggests that as choosier buyers demand easier access to amenities to satisfy convenience and lifestyle demands, expect to see increased price divergence between the more buoyant large urban markets and smaller urban areas that can’t offer the same range of facilities. ‘2016 may be the year when many young urban professionals finally give up on the London market and consider long term career moves… Taylor Scott International
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