The Savills report says that annual house price growth stood at just 3.9% at the end of October, with annual housing transactions appearing to have peaked at 1.2 million per year so the forecast for 2016 is 5% for average UK house prices. The mainstream market is of course more dependent on what happens to the cost of borrowing. ‘Capacity exists for short term price growth if rate rises are delayed further, but rising interest rates will squeeze affordability, making house price growth dependent on earnings and the pace of economic growth,’ the report says.
It adds that attractive commuter towns will also continue to offer good medium term price growth on property, particularly where travel times are shortened by rail improvements and demand for private rented accommodation will continue to rise. The restriction in tax relief and additional 3% stamp duty charge for buy to let landlords may result in rising private rents and shift investor focus towards higher yielding sectors of the market, particularly key regional cities, it suggests. ‘Good quality refurbished office space in the UK’s top seven major cities will experience stronger than average rental growth, reaching levels recently seen for similar assets in London,’ says Mark Ridley, chief executive officer, Savills UK and Europe.
Source: Property Wire
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