House prices across the UK are expected to increase from next year onwards, according to new estimates. Data from BNP Paribas suggested that around 6.7 per cent growth would occur in 2013, with annualised projections of six per cent from now until 2016. This contrasts with slight growth of 2.1 per cent this year and negative growth in 2008 and 2011. Rents are expected to continue rising in core city areas, the organisation claimed, as supply shortages ensure demand remains high. Improvements in the employment market and economic outlook could boost these predictions even further, it added.
According to the company, the divide between north and south property values will broaden over the next five years, noting there will be "significant regional differences". Yorkshire, the north-east and the north-west have forecasted growth of between four and five per cent, while the West Midlands will jump 5.2 per cent and Wales slightly less at 2.8 per cent. London was highlighted as the country's main driver, with growth prospects of approximately eight per cent. The east and south-west regions are estimated to see increases of 6.2 and 6.3 per cent respectively.
This news followed recent data from Halifax that revealed a GBP110,000 rise in the value of houses in the best-performing regions of the UK over the last ten years. Again, the bank found central London to lead the way in terms of growth in the last three years, followed by Hampshire and Brighton and Hove. BNP Paribas said that new home applications showed the number of units being planned is on the increase, despite fewer housing schemes being implemented.
This trend would suggest that developments are getting bigger, it stated, with volume housebuilders returning to the market, while smaller companies get squeezed out because they are unable to generate adequate funds. The statistics showed there has been an increase in first-time buyers and property investors in the market. The organisation commented: "New-build mortgages have increased, enhanced by the first-time buyer market which was encouraged in part by the first-time buyer stamp duty holiday and a reasonable availability of low-deposit schemes through NewBuy and other developer-led initiatives."
- Wednesday 27 June 2012