Property prices may rise in the next year according to experts. There is a higher chance of experiencing interest rate hike resulting to slow gains in the property prices.
The Guardian reported that there is a likely chance house pricing will rise to 8 percent in 2016. This will be experienced in some parts of the UK. Based from the predictions, there would be an increased number of homes that are sold on the cards, too.
They said that there are a lot of factors that lead them to say the market's trajectory over the year and beyond. Mark Carney, the Bank of England's governor, said that there is also an expected interest rate increase in the next year due to some reasons.
The Royal Institution of Chartered Surveyors (RICS) mentioned that there will be a 6-percent increase in prices for the houses. That is if the US rates will rise, too. "If the US rate rises again we might start to see mortgage rates rise," Simon Rubonsohn, chief economist, said.
He added, "I would imagine that the best value mortgage rates have been around already." He also said that there would be a possibility that with the predicted 6-percent increase to the prices of properties, £17,000 will be added to the current average of £269,477 for this year.
Housing analyst Sam Mitchell disagreed to these predictions. He said that there won't be any house pricing increase in 2016. Instead, this event will happen at the start of 2017.
Lucian Cook, the head of UK residential research at Savills, stated that this event will not happen to all parts of the UK, however, in some parts, not even that much in Midlands and the north of England.
"I wouldn't expect dramatic house price growth in the Midlands and north next year. As their economies get going, interest rates will start to rise."
"If interest rates stay lower for longer that gives more capacity for the ripple effect [from London] over the course of the year," Cook added.
To these two mentioned places, there would be around 5 percent increase in the Midlands and 2.5 percent in northeast and 3 percent in northwest. The rest will have the static rates. That means, the predicted increase of house pricing will not be general in the entire UK, but in some parts where the interest rates might go up and if the US rates will do the same.
