Asking prices for properties in the UK will rise by 2% in 2017, although sellers in inner London will be asking less as the bubble “continues to deflate”, property website Rightmove has predicted.
Sellers entering the market over the past month have priced properties 2.1% lower than those putting homes up for sale the previous month, at an average of £299,159, but Rightmove said it expected next year to be a seventh consecutive year of rising prices.
Despite uncertainty over the UK’s decision to leave the EU and stretched affordability, new asking prices are 3.4% higher than in December 2015, and the firm said it expected high demand to continue to lift prices.
Miles Shipside, Rightmove director, said: “There was a bout of jitters with the unexpected referendum result, albeit now seemingly short-lived, but more may arrive after article 50 is invoked.
“For the time being any nervousness is being overridden by high demand for the short supply of suitable homes for sale in the lower and middle market in many parts of the country.”
However, in inner London, Rightmove has forecast a 5% fall in asking prices. In some boroughs, there have been double-digit falls over the past year. In Camden, Rightmove said homes coming on to the market over the past month were typically 17.7% cheaper than in December 2015, at an average of just under £1m.
Separate figures from estate agency Countrywide show that rents in London fell by 0.7% in the 12 months to November, the biggest annual fall since October 2010. Although rents in Greater London are still much higher than in the rest of Britain, averaging £1,298 a month against £809, Countrywide said the gap had reduced since 2015, from 62% to 60%.
It said the fall had been driven by a surge in the number of rental homes available in the capital, with the number of properties up by 32% year on year while the number of tenants increased by 9%. During the month, asking rents were cut on 11% of London homes.
For would-be buyers, getting on the housing ladder is made harder by a failure to build enough homes to meet demand. Research by thinktank Civitas has found that net housing supply in England was only enough to meet 80% of the annual projected growth in the number of households for this parliament, and 90% of the growth by 2039. In London, the supply of housing is running at a rate that will provide just 55% of the homes that are needed to cater for new households over the long term, and in 14 of the capital’s 33 boroughs the rate is below half. In Haringey, north London, the rate of building is just 12% of expected household growth.
Daniel Bentley, editorial director at Civitas, said: “This shortfall is not only pushing up prices but stymying the household growth we would otherwise expect to see – as more youngsters live with their parents or enter house-share arrangements – and creating homelessness.”