by Paul Smith, CEO of haart estate agents
Our most recent haart's property market update shows that house prices rose nearly £30,000 in 2015, £2,000 more than the average salary in the UK. This is certainly good news for people looking to release the equity tied up in their home, particularly as in many cases their property has been ‘working’ harder than them, but it also goes to show the extent to which the shortage of homes has impacted average house prices. The intense level of competition for a limited number of homes is the upward driver – our most recent data shows there are currently 12 buyers chasing every property to come onto the market.
The solution to the problem is on the supply-side – more houses need to be built to relieve the pressure. Currently this isn’t happening. The most recent ONS construction output data showed that total housing output fell 1.6% in the year to October. Housebuilders need to be given more incentives such as tax relief to actually get building and the government must deliver on its recent commitments to deliver more homes.
Due to the level of competition we are currently seeing, 2016 will be a particularly active year for the property market and we expect UK average prices to rise by around 9% over the year. The first few months will be especially busy as buy-to-let investors clamour to complete purchases by April and the introduction of the 3% stamp duty surcharge. These months are going to be tough on first-time buyers, who will be competing with investors for similar property stock, but after April the competition from buy-to-let investors should recede and first-time buyers will see their fortunes improve.