House prices set to rise in 2016 due to the lack of new homes developments, according to a recent statement by Nationwide.
Robert Gardner, chief economist at Nationwide, said:
The risks are skewed towards a modest acceleration in house price growth. The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.
In January 2016 the average price of a property in the UK increased by 0.3%, this is 4.4% higher than the previous year. Was this due to the lack of new homes?
So what does this mean for first time buyers?
- As of January 2016 the average property price in the UK was £196,829.
- According to The National Association of Estate Agents, the average number of houses listed with each member fell to 37 – half the figure it was 10 year previously.
- Number of house hunters in December increased compared to 10 years ago when more properties available.
- 44% increase in interest from investors looking to secure a buy-to-let purchase before the increased stamp duty comes into effect in April 2016
According to the National Association of Estate Agents, first time buyers only accounted for 24% of house sales in December 2015.
Mark Hayward, managing director of the NAEA, commented:
There is some potential light for first-time buyers – once the new tax rate increase in April is in place we may see less investment from buy-to-let or second-home investors, which may mean less competition for first-time buyers.