Rightmove says tiny dip now means prices will soar in 2016

Rightmove says the seasonal 1.1 per cent dip in average asking prices coming to market in the past month is the lowest drop seen in any December since 2006. 

It means the annual increase in the average asking price is 7.4 per cent, or almost £20,000, “and is a strong indicator that upwards price pressure will continue in 2016” according to Rightmove’s housing market analyst Miles Shipside.

“Whilst a fall is the norm at this time of year, this is December’s best post-financial-crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up” he says. 

“Although the average price of property coming to market is already up by a hefty 7.4 per cent compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year.”

The portal’s 2016 forecast is for new seller asking prices to rise by six per cent, in spite of increasingly stretched affordability and rising taxation of the buy-to-let sector. 

Rightmove analysis of email enquiries sent by potential buyers to estate agents since the start of October this year shows a jump of 37 per cent compared to the same period in 2014. In contrast to this surge in demand, the number of properties coming to market has fallen by five per cent over the same period.

“Whilst initiatives are in place to encourage developers to build more new homes to supplement the supply of existing ones coming to market, the lead-times are long and developers face capacity constraints. In the meantime strong demand is being further fuelled by the additional momentum and aspiration for home-ownership that schemes such as Help to Buy create” says Shipside. 

His forecast, if it comes true, means that the average asking price will be another £17,000 higher by the end of 2016.