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2017: House Prices to Rise as Demand Outstrips Supply

New projections for the residential property market next year will see house prices increase by 3% across the UK, as supply constraints continue to underpin growth in the sector.

New projections for the residential property market next year will see house prices increase by 3% across the UK, as supply constraints continue to underpin growth in the sector.

The Royal Institution for Chartered Surveyors’ (RICS) latest press release suggests that a historical supply restriction will continue to define trends in the UK’s residential market in 2017.


Whilst the government’s recently launched schemes designed to tackle the country’s lack of housing stock are said to be “welcomed”, RICS has said that these measures will not fully alleviate years of chronic undersupply.


Prices are projected to rise by 3% as result in 2017, with the East Anglia, North West & West Midlands all forecast to see significant growth in the year.


Prices in Central London, however, are set to stabilise following recent dips, as savvy foreign buyers continue to capitalise over favourable exchange rates in the year ahead – a key driver for this market.


In terms of transaction activity, sales are forecast to stabilise, amounting to a total of 1.15 or 1.2 million throughout the year; whereas rents are likely to increase further by 2-3% across the UK.


Commenting on 2017’s estimates, RICS Chief Economist, Simon Rubinsohn said:


“Although recent announcements by the government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents. As a result, the affordability challenge will remain very much to the fore for many.


“Meanwhile the lack of existing inventory in the market is impacting the ability of households to move and will contribute toward transaction activity over the whole of 2017 being a little lower that in the year just ending.”


Last week, new estimates by estate agency Cushman & Wakefield project that the UK’s rental property market will also remain resilient throughout Brexit negotiations.