House prices are set to rise by an average of 9% in 2016 across England and Wales according to Home.co.uk.
The predicted acceleration in price growth (prices grew 8% in 2015) is being put down to a further restriction in supply.
Across the UK however price growth in Wales, Yorkshire and the North East are predicted to be 2%, 2% and 1% respectively. Conversely prices in the East and South East are predicted to grow by 13% and 12% with Greater London matching the England and Wales average of 9%.
However that picture of restricted supply isn’t consistent across the UK with two areas seeing an increase in housing stock for sale between November 2010 and November 2015; Yorkshire and the Humber, where supply increased by 10%, and Wales which saw a 2% rise.
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.
“If we extrapolate the current downward trend in stock levels, there will be no property for sale in December 2022.
“Of course, this is merely an absurd hypothesis, but it serves to illustrate that, at some point, the market dynamic must change and supply must increase.
“When supply does increase at a rate sufficient to rebuild stock levels, it will of course be greater than buyer demand. Such periods in the economic cycle of the property market are commonly referred to as ‘downturns’ and during such times prices fall.
“What will trigger the next downturn? Property is a highly leveraged market and history shows that a rise in interest rates has almost always been the cause of a house price correction. This could be the case again although the trigger may well be different in these interventionist times.”
This month, there were 405,278 properties on the market in England and Wales, down 16.1% on December 2014’s figure of 483,224.
