New Homes blog
WHY THE HOUSING MARKET IN 2016 WILL BE STRONG - BLOG BY ANDREW LOVEDAY
The housing market has enjoyed a vibrant few years and I see no reason why 2016 will change that.
Here are the highlights of the market as I see them:
- The introduction of 40% Help to Buy London will be the catalyst for strong growth in the first time buyers’ market for homes of £600,000 or less, particularly in the outer London boroughs. Overall in London the current 20% Help to Buy scheme has had a limited impact, however this new scheme is likely to change that and will enable many more first time buyers to buy a home in the capital.
- We expect the ripple of prices from outer London into the Home Counties to continue following the trend we have experienced particularly in the last quarter of 2015.
- The lack of second hand homes for sale will continue to be a feature of the housing market in 2016. It is therefore likely that demand for new homes will remain strong as buyers become increasingly aware of the benefits of buying a new home including the latest specification, ease of maintenance, lower running costs and the fact that they are designed for modern living.
- Interest rates may nudge upwards but this may not filter through to the mortgage market as lenders become increasingly competitive to attract new business.
- Economic growth forecasts remain favourable with wage growth likely. This will be backed-up by the Government’s clear desire to increase home ownership particularly for first time buyers hence Help to Buy has been extended to 2021 as part of a package of measures to boost the housing market which were announced as a key part of the Autumn Statement.
- London still continues to be the driver of the housing market in the South of the country particularly its effect on key commuter towns and cities such as Chelmsford, Horsham and Cambridge which are likely to experience above average growth. This will principally come from first time buyers and families looking for quality homes in these locations.
- Cambridge will continue to perform particularly strongly in response to demand from the rising population driven by significant employment prospects in the location from biotech and pharma companies.
- The North West is set to benefit from major investments following the launch of the Northern Powerhouse. An increase in business and job creation, coupled with plans to improve northern transport links, will bring more people into the area, therefore increasing the need for new homes throughout the region.
- The regeneration of areas in Liverpool and Salford have further fuelled demand for high quality homes in both Merseyside and Greater Manchester and we expect to see steady growth in 2016 as more and more buyers in the North West take advantage of the 20% Help to Buy scheme.
- PRS schemes will help to carry forward large-scale housing schemes at a greater rate, which is currently evident in Liverpool. This dramatically changes the perception and look of the communities and therefore fuels demand for homes in these areas.
All indications are for a strong housing market not just in 2016 but also in the next few years.