House-Price Growth Expected in 2015
With 2014 coming to a close, experts within the housing market start to make their predictions for the coming year. The annual forecast by the Royal Institution of Chartered Surveyors (RICS) has highlighted healthy growth levels for the sector across 2015.
The RICS yearly forecast for the housing market predicts that house prices will rise by around 3% next year. These price rises are expected to be seen across the whole of the UK, with some areas seeing above-average increases and other markets cooling slightly. The rise in prices is expected to be helped by the recent changes in Stamp Duty thresholds. This will reduce the need for sellers to market their properties at a lower level to attract more buyers, even when they have outstanding features such as external stairs or large extensions.
Following higher than average growth in previous years, parts of the capital are expected to stall this year and see some of the lowest increases in 2015. The RICS report predicts that London, along with Wales and the South West, will see rises of 2% or less.
More Sales Completed
As well as house prices rising, there will also be a growth in the number of completed transactions in 2015. The report by RICS predicts that this will increase from 1.22 million this year to 1.25 million next year. This might highlight good levels of growth, but it is still well below the levels of 1.67 million that we saw in 2006.
The lack of availability in the mortgage market, as lenders impose stricter criteria on potential buyers, could case concerns. They are now considering a buyer’s ability to afford the repayments in more detail. Buyers are also taking affordability seriously, with 90% of new mortgages now on fixed deals. The negative effects of this are likely to be reduced by a stronger economy and the Stamp Duty alterations.
More Properties Required
One of the major issues that we are currently seeing in the housing market is the lack of available properties. This could boost the price increases, as more buyers compete for fewer properties, such as those with external stairs. This issue, though, is also preventing many first-time buyers from getting on the property ladder, with a reduction in the number of starter homes and fewer property owners looking for their second home.
The report shows that more developments have begun, and the forecasts are that 155,000 housing starts are expected in 2015. This level has grown from 125,000 throughout 2013 and 100,000 across 2012. However, it is still below the level that is required to solve these issues.
The annual report from RICS highlights that we are seeing a more positive outlook for the housing market. There are undoubtedly some areas of concern, such as mortgage availability and a lack of supply, but these are balanced by beneficial elements, including alterations to Stamp Duty thresholds. This should ensure that the housing market continues to experience growth over the next year.