UK house price growth will slow to 3% in 2017

The Royal Institution of Chartered Surveyors (RICS) housing forecast for 2017 predicts that house prices in the UK will see an average increase of 3% over the course of next year as the number of transactions stabilises.

A year ago, the RICS predicted price rises of 6% and official figures are on track to meet that, with October’s annual growth rate at 6.9%.

The RICS forecasted that the legacy of insufficient house building will mean that demand will outstrip supply. RICS said it expected this supply issues will continue to drive prices upwards over the next 12 months.

“Following on from the 2016 forecast, the supply pipeline or lack of it is at the forefront of the analysis and dominates the residential market…..While there is an improvement, the legacy of building on an insufficient scale has left the average inventory on estate agents’ books close to a historic low.”

RICS predicts that East Anglia, the North West and West Midlands will see gains above the national average during 2017. Meanwhile, prices in Central London look set to stabilise after recent declines, with support provided by the weaker exchange rate encouraging foreign buyers.

RICS also feels that its proposed ban on letting fees is clouding the picture for both prices and rents, which it believed would also grow by up to 3% over the coming 12 months.