insideSUSSEX Magazine Issue 12 - February 2016 | Page 97

PROPERTY

A SOARING RISE FOR SUSSEX BRICKS AND
MORTAR, PLUS NEW HOPE FOR NEW BUILD
When it comes to forecasting our property prices, the Royal Institute of Chartered Surveyors
(RICS) are a pretty safe bet and their 2016 predictions estimate house prices in the South East
will rise by a whopping seven per cent throughout the year – more than the national average
increase of six per cent.

Due to a nationwide supply shortfall continuing
to push prices higher, house prices in the
South East will see an increase of seven per
cent over the course of the next year according
to the RICS housing forecast for 2016, a figure
higher than the national average increase,
which currently stands at six per cent. Only
East Anglia will see a higher predicted price
rise of eight per cent, and the North East is
likely to see the most modest price rise with a
predicted increase for 2016 of three per cent.
National transactions will edge up to between
£1.25 and £1.3 million – an increase up from
£1.22 million in 2015 – and in the South East
specifically, transactions are expected to rise to
£156,000 this year, up from last year’s figure of
£150,000.

holdups involved in development mean that
prices, and for that matter rents, are likely to
rise further over the next twelve months. 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 ahead, 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.

Although housing has climbed the
government’s 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.

“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.”

Simon Rubinsohn, RICS chief economist,
commented: “Housing has clearly leapt up the
government’s agenda, but despite the raft of
initiatives announced over the past year, the

Jeremy Blackburn, RICS head of policy, added:
“There have been many welcome supply side
measures in the government’s productivity plan
to balance the likes of the Help to Buy scheme.

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The brownfield fund, local plan enforcement
and new development corporations should
help get more homes built and the passage
of the Housing & Planning Bill is key. We still,
however, need to help councils, housing
associations and community land trusts get
building in order to get anywhere close to a
coordinated and coherent strategy across all
tenures.
“Ramping up housing supply is positive, but
homeownership 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.”
To find out more about UK house price
predictions and rental markets, visit
www.rics.org