December 23, 2015
House prices to rise 6%, rents 3%
According to the Royal Institution of Chartered Surveyors, rent increases are set to outpace those of house prices over the next five years. The institution is forecasting that average house prices will rise by 6% in 2016. East Anglia is predicted to lead the way, with a rise of 8%. This compares with 5% in London, 3% in the north east and 4% in Scotland. Rents, in contrast, are forecast to rise by 3% over the 12-month period. Rising prices will be driven by the imbalance between supply and demand, and are predicted to outstrip any rise in household incomes. The areas with the highest number of transactions are likely to be the northeast, Wales, Scotland and Northern Ireland, where prices remain low relative to the rest of the UK. Simon Rubinsohn, RICS's chief economist, added: "There is some justification for taking a more optimistic view of new build with significant incentives being put in place to deliver starter homes. While this may not on its own stem the upward trend in house prices, it could help to slow the rate of growth to something closer to the probable rise in household incomes."