House prices in the Yorkshire region are expected to rise by 6 per cent next year, according to a new forecast.
The rise, predicted by the Royal Institute of Chartered Surveyors’ (RICS), trumps last year’s climb for the UK, which the government’s Land Registry House Price Index put at 5.6 per cent in the twelve months preceding October of this year.
The Yorkshire forecast is in line with the national average, but elsewhere, East Anglia prices were predicted to lead the way with an increase of 8 per cent, while the North East was said to be likely to see the most modest price rises, with a predicted increase for 2016 of 3 per cent. London property was predicted to increase in value by 5 per cent.
The Office for Budget Responsibility had predicted that house prices would rise 5 per cent year-on-year until 2020. This forecast was cited in the Treasury blue book in which George Osborne’s Autumn Statement plan to build 400,000 homes in the private sector was announced.
RICS, which is the professional body for the land, property and construction sectors, blames supply problems for the likely increase in prices in 2016, saying it will outstrip any rise in household income.
Simon Rubinsohn, RICS’s chief economist, said: “Housing has clearly leapt up the Government’s agenda, but despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months.
“Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being.”
Mr Rubinshohn said the increase in house building could help slow the rate of growth “to something closer to the probable rise in household incomes” but warned that tenants could bear the brunt, as private rents go up and social housing is reduced.
A Department for Communities and Local Government spokesman said its initiatives have helped nearly 270,000 people to buy since 2010, and it is delivering 200,000 new starter homes.