December saw the rate of annual house price rises increase from 11.2% in November to 12.4%. The average house price in London is now £514,097.
An average property in London now costs a staggering ten times the average salary, according to the London Housing Commission.
What rise will we see for London house prices in 2016? The range of forecasts suggests prices will rise on average of 3%-6%. We predict property prices property in Bromley will increase by an average 6%-8%.
The London Housing Commission report for the Institute for Public Policy Research shows 500,000 new homes need to be built in the capital over the next 10 years to keep up with demand, but in the past 10 years only 194,000 were built.
So with the lack of new homes being built and it looks like interest rates will stay unchanged for 2016 these are two strong indicators why house prices could rise at an average of 5% this year.
But a good argument against a continuous rise in house prices is that they cost a staggering eight to ten times (earnings) the average salary. Looks like we have a very interesting year ahead.
Kevin Spires, Senior Sales Executive, Edward Ashdale, February 2016
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