Average house prices in England and Wales are expected to rise by 5.0 per cent in 2015 and by 4.5 per cent in 2016 according to high-end agency Hamptons International.
In December of last year Hamptons forecast that prices across England and Wales would rise 4.0 per cent this year and 4.5 per cent next.
In its updated forecast, out today, the agency says that against what it calls an improving economic background, house prices will continue to grow but that the pace of growth over the next two years will remain relatively subdued.
Affordability constraints, together with a moderating of price expectations for both buyers and sellers mean that house price growth is likely to remain in single digits over the coming two years.
Hamptons says London’s house price growth is expected to slow, but remain positive, with prices outside of the prime central markets stronger than inside them. Beyond London and the South, it says the North West stands out as a region that is expected to outperform its neighbours as confidence in its local economy and future prospects grow.
Despite the change in stamp duty, housing market activity over the year has been disappointing. There were 15 per cent fewer homes for sale in the first half of 2015 than the same period in 2014 as sellers were reluctant to come to market.
Even so, Hamptons has now boosted its 2015 forecast on the back of a continued low level of homes on the market.
In 2015, the agency forecasts prices in Greater London will grow by 6.0 per cent (4.0 per cent in 2016) outperforming Central London where prices are expected to rise by 3.5 per cent (3.0 per cent in 2016).
In the South East and East prices will rise by 6.5 per cent in 2015 and by 5.0 per cent in 2016. In the South West prices are forecast to end the year at 4.5 per cent and then rising by 5.0 per cent in 2016
By the end of 2015 Hamptons expects prices in the North East to rise by 2.5 per cent (3.0 per cent in 2016) and by 3.0 per cent in Yorkshire & Humberside (which will rise 4.0 per cent in 2016).
The North West stands out as the best performing region with price growth of 4.5 per cent over 2015 and 5.0 per cent in 2016