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Restricted Housing Stock Will Boost Property Prices in 2017

The vast undersupply of properties on the market, combined with the record low interest rates, will continue to boost the growth of UK House Prices in 2017, according to new research.

UK Property Investment

The vast undersupply of properties on the market, combined with the record low interest rates, will continue to boost the growth of UK House Prices in 2017, according to new research.

In their latest annual forecast, one of the UK’s biggest mortgage lenders, Halifax, announced that house prices are expected to rise between 1% and 4% in 2017 - increasing the average property value from £218,000 to around £220,000-226,000.


The wide range of growth is due to the high degree of economic uncertainty that is anticipated to continue this year, as the negotiations to leave the European Union are expected to start by the end of March.


While the projected price change is lower compared to the 6% increase recorded in 2016, the slower growth forecast is mainly caused by the tightening affordability in London and the South East of England.


Halifax predicts that there is a risk of prices falling in some parts of London, with the capital’s prime locations being under the most pressure.


Commenting on the report, Halifax’s housing economist Martin Ellis said:


‘House prices in relation to average earnings are at an historical high in the capital; at nine times annual average earnings. Additionally, mortgage affordability in London is worse than its long run average ... price growth will slow more sharply in London than elsewhere during 2017.’


The projected growth in house prices is in line with the Royal Institution for Chartered Surveyors' forecast for 2017, which has estimated an increase of 3% across the UK.

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