The average asking price for homes in England and Wales has increased by 8.2% year on year, while the total stock of property has dropped to a new record low, according to the latest residential index.
Just 386,000 properties are currently up for sale in England and Wales – that’s 47% fewer than in 2008.
The index report comes from property search engine Home, which says that growth in the property market is due to a lack of supply and low mortgage rates and the typical time on market is some 117 days across England and Wales, that’s nine days less than in January 2015.
Despite a small proliferation in supply, the total number of properties on the market has fallen to a new low. Just over 386,000 properties are currently for sale, equating to 47% less than in 2008. This trend looks set to dominate the UK property market in 2016, the report says.
Doug Shephard, director of Home.co.uk said, “Given such high levels of interest in property investment by both large and small investors, it is difficult to imagine prices going anywhere but up.
“Moreover, interest rates, another key market driver, remain at historic lows. First-time and next-time buyers are finding it nearly impossible to compete with the buy-to-let sector and renters look set to endure a wave of rent rises over the next couple of years.
“The ultra-low interest rate environment is allowing the gap between earnings and house prices to widen to historically dangerous levels, mainly in the south and east. This is clearly one of several, unsustainable trends in the current booming market”, he concluded.
It is going to be an interesting year for the property market in 2016, one thing that will certainly happen in England and Wales is that from April, stamp duty rates will be jacked up for anyone buying a home that is not their main residence – a similar change will happen in Scotland.
This will make things more expensive for second-home buyers and buy-to-let landlords and probably deter some potential buyers altogether.