Britain’s Housing market ‘hits the ground running’ in 2016

While 2015 was a seminal year for the UK housing market, there are no signs of this abating anytime soon. In fact, the market appears to have hit the ground running in 2016, at least if Rightmove’s house price index for January is anything to go by.

This is largely positive news, particularly if we drill deeper into the index and the statistics that underpin it. While buyers are likely to benefit from a more balanced market in 2016, however, vendors may be forced to sacrifice some of the existing value in their homes as the year progresses.

In sheer statistical terms, the index has revealed that the average price of a UK home has increased to £299,287 as of January 31st. This represents an increase of 2.9% from December, while Rightmove has also revealed that there was a 5% increase in the number of properties made available on the market during the first month of 2016. Perhaps most significantly, there was a 10% rise on the number of typical first-time buyer homes (with two bedrooms or fewer) that were listed on the market during this time.

As we can see, the balance between supply and demand is already on the way to being restored in the housing market. One of the main triggers for spiralling price points was the lack of available housing, with regions such as central London and the South East particularly affected. Now that this trend is slowly beginning to reverse, we will see the empowerment of buyers and the development of a marketplace where price are organically regulated over time.

But where does this turn of events leave vendors? In simple terms, those looking to sell their home in 2016 are still in a relatively healthy position, especially with the market set to grow at a rate of between 5% and 7% over the course of the next 12 months. It is the rate of growth that will steadily decline, however, creating more realistic prices and forcing vendors to manage their expectation when negotiating a sale.

If you think of 2016 as a year of consolidation rather than growth in the residential market, aspiring vendors may bemoan a slight decrease in the amount that they can expect to sell their homes for. The market is still buoyant, however, meaning that it is still possible for home-owners to achieve a quick sale that delivers a profit.

Most importantly, the decline in growth will actively empower a wider demographic of buyers and make it easier for vendors to sell their properties in 2016. After all, the market has arguably reached its tipping point in terms of prices, with trusted home buyers Property Rescue reporting that a 10-foot wide in South London was recently listed for a staggering £800,000.

So long as manageable growth is sustained, however, vendors will be able to list and sell their home as they please without compromising on their return or buyer demand.