RICS recently published its housing forecast for 2017, which predicts an average increase of 3% in house prices in the UK over the course of the year.

According to RICS, the supply of new houses onto the property market, 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 is expected to 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.

“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,” commented Simon Rubinsohn, RICS Chief Economist. “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,” he added.

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