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The UK housing market in 2016 looks set to benefit from the country’s improving economy, falling unemployment levels, rising wages and record-low interest rates, not to mention the widening supply-demand imbalance in the market, with most experts agreed that UK wide house prices will likely grow next year. However, London may see a reversal of fortunes, and we could even see property price growth turn negative as the effects of unsustainable high house prices and recent increases to stamp duty for wealthy purchasers deter investors. “I expect we will see a big decrease in the number of London apartment sales to Chinese buyers as capital controls in China start to tighten and their local economy continues to experience difficulties,” said Stuart Law, CEO of Assetz for Investors. Paul Smith, CEO at haart estate agents, agrees that house prices in London look high and anticipates a correction in property prices across parts of the capital over the next 12 months, especially at the top end of the property market, partly because of the impact of stamp duty on homes costing £937,000 and over. But with demand from buyers expected to outstrip housing supply, the company forecasts that property prices in the core UK property market will continue to rise in 2016. “On paper it will look like a tale of two countries as London will see an increase of around three to four per cent due to the top-end market correction,” said Smith. “There are around 29 buyers chasing every property listing and an abundance of mortgage providers but the problem remains a lack of appropriate stock. Unless the government takes drastic action to drive either private or public sector house building the situation is not likely to improve next year,” he added. |
