Predicting how the UK residential property market would fare in 2016 was a tricky business. With conjecture around interest rate rises and the impending Brexit vote, there were more variables than usual as the year began, posing a challenge to even the most reliable forecaster. But predict we did, through our resident expert and market commentator, Aylesworth Fleming Managing Director Matt Fleming.
And now the results are in.
Matt Fleming’s forecast for 2016, published in January, was for continued low supply of housing as fewer properties enter the market; for interest rates to remain unchanged; for stable market conditions to persist; and for house prices to rise by four to five per cent.
What none of us knew (and relatively few predicted) was that the British people would vote to leave the EU in June’s referendum. Despite the uncertainty this created, the residential property market remained resilient. So how is the market looking as this historic year ends?
Nationwide confirmed this week that house prices increased by 4.5 per cent across the UK in 2016. This is exactly the same percentage increase as we saw in 2015, but regional performances varied significantly. London performed below the national average for the first time in eight years, with 3.75 per cent annual growth, while East Anglia weighed in with property price increases of 10.1 per cent. The lowest price rises were in the North, where values barely altered through the year.
Matt Fleming said: “This has been quite a year for the UK, politically and economically, yet conditions in the housing market have underpinned another year of stability. Demand for homes continues to grow and supply is still lacking. Add record-low interest rates to the mix and we can see how the market has emerged in a strong position.
“What 2017 has in store for the UK housing market is yet more difficult to call. Nationwide and the Bank of England are predicting slower economic growth, but Nationwide still expects house prices to rise overall. Next year won't be as settled as 2016, this record-breakingly steady market will be disturbed as interventions and market forces take effect.”
To read the full Nationwide report see nationwide.co.uk/hpi
Matt Fleming co-founded property marketing specialist agency Aylesworth Fleming in 1985 and has tracked movements in the market ever since. He remains Managing Director of the business, which was acquired by OLIVER in 2015 and has expanded its specialism to deliver local area marketing for some of the UK’s top high street brands.