Property trends for 2016 and what to expect in the future
As we head into the new financial year for 2016, we saw the average house price in England surpass £300,000 for the fist time ever. But the hottest topic surrounding the UK property market at the moment is the level of supply and demand, and the fact that we’re still not building enough homes.
According to government statistics, a worsening skills shortage and high materials and land prices are putting pressure on builders’ costs. Construction activity has slowed significantly in the second half of 2015, with home construction bearing the brunt. Construction firms say the lack of available labour is likely to continue throughout 2016, and escalate the housing shortage.
So far in 2016 we’re experiencing increased immigration, an ageing population, and the rise of ‘Generation rent’. These factors are the key contributors to an ongoing rise in demand for property in the UK. Nobody is expecting a sudden surge in construction, which indicates there will be little to no slack in the property market’s demand and supply pressure.
Trends for 2016:
- Average house prices in England and Wales have broken the £300,000 barrier for the first time.
- House prices have increased by 50 per cent in a decade
- In London the average asking price hit a record £644,045.
- According to Rightmove director Miles Shipside, an average of 30,000 properties had come to the market each week over the week of March 2016, a three per cent increase on the same period in 2015.
What we can expect in the future:
- A rise in valuations of 23 per cent is predicted by 2020.
- First-time buyers will need to earn £64,000 by 2020 to afford a house.
- In London, the average couple may have to put down a deposit of at least £28,000 and be earning a combined income of £118,000.
- First-time buyers would need to earn as much as twice the current average UK salary – and in excess of £100,000 in London – to afford to get on the housing ladder by the end of the decade.
- The rise of ‘Generation Rent’ is upon us with increasing immigration, and generation’s Y and Z preferring to rent a home as opposed to purchasing.
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