The Royal Institution of Chartered Surveyors (RICS) has predicted an average 3 per cent increase in the prices of houses in the UK in 2017. This comes as a relief to investors in the residential property market in the wake of speculations of stagnation of price growth earlier this year.
One of the main reasons that will drive the price growth of homes is the poor supply of new houses to the market. The shortfall in the availability of homes to buy will push the rents upwards by 2-3 per cent, the RICS said in its housing forecast for 2017.
The RICS sees an average inventory on estate agents books close to a “historic low” and the trend of poor supply of homes witnessed in 2016 is likely to intensify in 2017. As demand continues to rise, the prices of homes will increase accordingly, especially in London.
The price rise may impact the domestic buyers, but will be advantageous for overseas investors in view of the weaker exchange rate. Foreign buyers may see this as an encouragement to acquire residential properties in London in view of the assured return on investment in the form of annual rents or short-term lets or as long-term assets.
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East Anglia is likely to continue its trend during 2016 and alongside the North West and West Midlands is likely to record gains higher than the national average