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Halifax forecast latest to predict subdued 2016 housing market

Britain’s biggest mortgage lender, the Halifax, says the housing market will slow next year with average price rises of four to six per cent - lower than the current 9.7 per cent.

It warns that increasing difficulties in getting on the housing ladder, together with a growing prospect of at least one interest rate rise, will put the brakes on higher rises. 

Price rises are set to be broadly in line with income growth beyond 2016 as steadily rising interest rates increase the affordability constraint on demand.


“There’s little reason to expect any fundamental shift in the key market drivers in the immediate future. As a result, the substantial imbalance between supply and demand is likely to persist, maintaining upward pressure on house prices in 2016” says Halifax’s housing economist, Martin Ellis.

“On average, UK house prices look expensive compared to incomes but valuations are supported by the low levels of property for sale, low levels of housebuilding, and exceptionally low interest rates.Nonetheless, with house prices continuing to increase more quickly than average earnings, it is increasingly difficult to get on the housing ladder” he adds. 

Overall, the Halifax believes that sales nationally in 2015 are likely to be very similar to 2014’s 1.22 million.

London will see the biggest slowdown. Mortgage affordability in the capital is now worse than its long run average; the only region in the UK where this is so. 

“Cash transactions account for around one-third of all home purchases in England and Wales. There are significant regional variations around the national average with cash sales representing the smallest proportion of total sales in London (27 per cent) and the highest in the south west (40 per cent)” explains Ellis.

  • Terence Dicks

    Exceptionally low interest?? I do not notice ANY lender having exceptionally low interest charges on their Mortgages.

    The Base Rate is exceptionally low, so as a Bank you do not pay out much in the way of interest, but you all charge quite a lot of interest.

    Must be nice to have your bread buttered on both sides as usual for FS industry.

  • Anna  Dickson

    The slowing of house prices was inevitable, it couldn't continue in that out of control way for much longer. Plus if George Osborne actually sticks to what he said in the Autumn Statement and builds anywhere near 400,000 new affordable homes then they might be on the way to easing the supply demand crisis too. (I'll hold my breath for that one).


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