Housebuilding will fall short in 2016
The government won’t be able to meet its housebuilding target of 80,000 homes next year, My Home Move chief executive Doug Crawford has predicted.
Crawford reckoned 40,000 new homes will be built, although he questioned how many would end up in the hands of first-time buyers.
He also forecast house prices to rise between 6-8% next year, meaning the average property price could surpass £315,000 by the end of the year.
He didn’t expect the Help to Buy ISA to do much for the first-time buyer, as he said it won’t make a difference for at least three years.
Crawford said: “Those who don’t have access to a gifted deposit, getting on the property ladder is going to be a real struggle.
“Throughout 2016 we expect to see 40,000 new homes built, only 50% of the government’s annual target of 80,000, but just how many of these end up in the hands of first-time buyers is still up for discussion.
“Despite the good intentions of the new Help-to-Buy ISA, we fear it may do nothing to revitalise the first-time buyer market for at least three years, due to the cap on the amount people can save.
“As such we expect to see conservative market growth (4.6%), an increase in 95% LTV mortgage products from lenders and an announcement that the ‘Help to Buy’ mortgage guarantee scheme will continue past its deadline of 2016, until FTB activity picks up.”
He added: “We expect to see UK property prices rise by between 6% – 10% over the year.
“Alongside this we’re predicting housing transactions to grow at a conservative 4.6%, mainly driven by the new build market, as the dearth of housing stock continues to dictate.”
Crawford reckoned the real winners in 2016 will be cash buyers.
He said: “For those in the position to buy without a mortgage the market is moving in their favour and will continue to do so for the next year.
“These buyers have the flexibility to make quicker and higher offers than their mortgaged counterparts, and are often the gazumpers able to secure the property of their dreams. “