House prices set to rise next year, say surveyors
House prices in the UK will rise 2% next year and rents will go up 4%.
The predictions are from the RICS, which is also forecasting a rise in the number of transactions.
It estimates that there will have been 930,000 transactions this year, and that there will be 960,000 next year.
The RICS says it has arrived at its figures using Council of Mortgage Lenders’ data. The CML itself is forecasting 825,000 housing transactions in the UK for this year.
According to the Land Registry, there were 653,487 sales in England and Wales in 2011, so if the RICS figures are correct, there will have been a large rise in transactions this year – and also a boom in transactions this autumn and winter. Latest Land Registry data shows that housing transactions between January and August inclusive this year totalled just 423,735.
The RICS is also predicting that the number of repossessions should dip below 35,000 for the first time since 2007.
Simon Rubinsohn, RICS chief economist, said: “The average house price in the UK looks set to rise by a further 2% next year, despite the uncertain outlook for the economy.
“More positively, the amount of sales going through should also see an increase across the country, climbing to its best level since 2007, as the Funding for Lending scheme helps boost the availability of mortgage finance.
“But these tentative signs of recovery in the sales market should not blind us to the very real problems that still exist. Even with the Funding for Lending scheme and some other government policies beginning to be felt in the mortgage market, many first-time buyers will continue to find it difficult to secure a sufficiently large loan to take an initial step on to the housing market.
“Meanwhile, the alternative of renting is becoming more and more costly, with a further increase in rents likely in 2013. Critically, the Government needs to ensure that the conditions are in place that will enable the stock of new housing, whether for purchase or rent, to rise more rapidly.”