Local house prices to rise 5%

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House prices in the south west are set to rise by 5% over the course of next year, according to the RICS housing forecast for 2016.

This is lower than the national average increase of 6%, but the same as London and Northern Ireland. The north east is likely to see the most modest price rise with a predicted increase for 2016 at 3%.

Transactions nationally will edge up to between 1.25 and 1.3 million (from 1.22 million in 2015). In the south west transactions are expected to rise to 101,000 in 2016 from 97,000 in 2015.

The rise, says RICS, is being driven by demand outstripping supply. RICS chief economist, Simon Rubinsohn, commented: “Housing has clearly leapt up the Government’s agenda but despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months.

“Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being.”