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HOUSE PRICES IN THE UK will see an average increase of 3 % over the course of the next year as the number of transactions stabilises , according to the RICS housing forecast for 2017 .
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 .
Looking forward , transaction activity will stabilise and is likely to come in between 1.15 and 1.2 million , a little below the 1.25 million likely to be recorded for the whole of 2016 . The prediction for 2017 reflects the trend over recent months . East Anglia is likely to continue its trend during 2016 and alongside the North West and West Midlands is likely to
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record gains higher than the national average . Meanwhile , prices in Central London look set to stabilise after recent declines , with support provided by the weaker exchange rate encouraging foreign buyers .
Simon Rubinsohn , RICS Chief Economist , commented : “ Although recent announcements by the government on housing are very welcome , the ongoing shortfall of stock across much of the sales and lettings markets is set to continue to underpin prices and rents . As a result , the affordability challenge will remain very much to the fore for many . Meanwhile the lack of existing inventory in the market is impacting the ability of households to move and will contribute toward transaction activity over the whole of 2017 being a little lower that in the year just ending .”
Jeremy Blackburn , RICS Head of Policy , commented :
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“ The Housing White Paper will be a defining moment in January , to see if more radical thinking in Whitehall is a reality . The proposed ban on lettings agents fees , and the unintended consequences of such a blunt policy , will also be a strong feature of the year ahead . |
“ Whilst the system based on large , private housing developers and homes for owner occupation has increased house building , it ’ s not delivering . The UK needs a co-ordinated strategy for building across tenures , using all of the delivery and technology mechanisms at our disposal .” |