Home prices in London and south-east England are set to rise by up to 7 per cent in 2016, according to independent property research published today. The speculative property developers who have been homing in on Croydon must be rubbing their hands together.
The Royal Institute of Chartered Surveyors’ annual housing market forecast says that a paucity of supply of new homes will see prices continue to rise in the next 12 months. In Croydon, there were just 12 new council homes built between May 2014 and October 2015, underlining why most people have to rely on the private rental sector or trying to get on the property ladder.
Or suggesting that the Labour-run council is trying hard not to do anything which might undermine the property interests of Westfield or other developers.
Citing a national average increase of 6 per cent for 2016, RICS predicts a 5 per cent rise in London and 7 per cent rise in the south-east – which includes Surrey and Kent. East Anglia’s property prices will outstrip the rest of the country, RICS predicts, at 8 per cent.
“Although housing has climbed the policy agenda, with supply issues dominating the private housing market the RICS forecast suggests that the likely increase in prices in 2016 will outstrip any rise in household income,” the report says.
“Housing has clearly leapt up the government’s agenda but despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months,” said Simon Rubinsohn, RICS’ chief economist.
“Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being.
“Looking further out, there is some justification for taking a more optimistic view of new build with significant incentives being put in place to deliver starter homes. While this may not on its own stem the upward trend in house prices, it could help to slow the rate of growth to something closer to the probable rise in household incomes.
“Critically, our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership at the expense of other tenures. Discouraging Buy to Let could see private rents take even more of the strain if institutional investment doesn’t increase significantly, particularly given the likely reduced flows of social rent property going forward.”
The head of policy at RICS, Jeremy Blackburn, believes that the public sector – councils and housing associations, have an important role to play in helping to slow house price inflation “to get anywhere close to a co-ordinated and coherent strategy across all tenures”.
Blackburn said, “Home ownership should not be the only game in town given the amount of private rented accommodation we need. A mix of market and rented housing is required and Starter Homes should not be seen as the panacea to solving the housing crisis but as forming part of a larger mix to meet the wide range of housing need the country is crying out for.”
Inside Croydon: Named among best regional media campaigns, 2014.
- Croydon’s only independent news source, based in the heart of the borough: 729,297 page views in 2014.
- If you have a news story about life in or around Croydon, a residents’ or business association or local event, please email us with full details at firstname.lastname@example.org