The Royal Institute of Chartered Surveyors has announced the most bullish forecast for the housing market in saying it expects house price growth to be 3 per cent in 2017 indicating a further cooling in the rate of growth however the legacy of insufficient building in years gone by ensures demand outstrips supply.
“Following on from the 2016 forecast, the supply pipeline or lack of it is at the forefront of the analysis and dominates the residential market,” it said. “While there is an improvement, the legacy of building on an insufficient scale has left the average inventory on estate agents’ books close to a historic low.”
The slowdown in activity in the housing market has been widely reported since the Brexit referendum in June of this year, with a reduction in the number of properties coming on to the market whilst buyers have continues to register interest.
RICS expects the highest growth rates to be in East Anglia, the north-west of England, and the West Midlands where they anticipate outperformance of the national average. The troublesome London market is predicted to stabilise and eek out a slim increase of 1 per cent partly as the collapse in the value of the pound entices international buyers back into the market.
“Although recent announcements by the government on housing are very welcome, the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents,” said Simon Rubinsohn, chief economist of Rics.
“As a result, the affordability challenge will remain very much to the fore for many. Meanwhile the lack of existing inventory in the market is impacting the ability of households to move and will contribute toward transaction activity over the whole of 2017 being a little lower that in the year just ending.”