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2016: what to expect for housing

Posted on Friday 22nd January, 2016

Looking ahead to the next 12 months in the housing market, it’s worth asking ourselves: is it just going to be more of the same?

In 2015, interest rates remained low and mortgage borrowing continued to surge. According to the Office of National Statistics http://www.ons.gov.uk/ons/rel/hpi/house-price-index/october-2015/statistical-bulletin.html in the 12 months to October 2015, UK house prices rose by 7%. In the East and the South East, the average increases were 10.4% and 9.5% respectively. Good news if you had significant equity in your home, less so if you were struggling to get on the property ladder.

So what’s next in 2016? According to the Royal Institute of Chartered Surveyors http://www.rics.org/uk/news/news-insight/press-releases/uk-house-prices-to-rise-by-6-in-2016/ house prices are predicted to increase by 6% in the UK over the coming 12 months. Again, we should expect these figures to be higher in the East and South East as demand continues to outstrip supply. So far, it’s all sounding pretty familiar.

However, there are some changes anticipated for 2016. For example, we should see a cooldown in the buy-to-let market, which accounted for around 15% of mortgages taken out in 2015. From April, a higher rate of stamp duty for second home owners will come into force; last July the Chancellor also announced a cut in mortgage interest relief for higher rate taxpayers. The idea is to give first-time buyers more opportunities in a market where they often compete with professional landlords. Let’s wait and see if these measures have the desired effect.

Interest rates are expected to remain low – experts are still debating whether the Bank of England will increase the base rate from 0.5% this year or wait until 2017. Either way, large increases aren’t expected. So while house prices look set to rise at a higher rate than salaries, we’re still living in an era of very competitive mortgages.

As ever, there a lot of different factors to consider. Whether you’re a newcomer to the property market or a seasoned pro, we can provide the extra insight and expertise to achieve your goals. Please do not hesitate to contact us:


0800 970 1795


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