RICS: 2015 house prices to increase by 3pc

RICS expects the South West, Wales and London to experience the lowest rises with prices increasing by 2% and 0% respectively, saying that the capital is already ‘pausing for breath’ in terms of price and activity after over-performing in the early stages of the recovery.

However it expects the eastern boroughs and some other non-prime areas to see more buoyant market conditions persist through 2015.

It believes the number of sales transactions should increase from 1.22 million in 2014 to 1.25 million in 2015 as a result of a firm economy and the Stamp Duty reforms; however this stands well below the 2006 total of 1.67 million.

The Stamp Duty reforms introduced in the Autumn Statement will be a ‘tonic’ for first-time buyers according to RICS, but it says the bigger issue of affordability is not going to go away.

RICS also believes that rents will rise by 2% in 2015, with the strongest rent rises to be recorded in the South West and the North East of England.

Repossessions are also expected to fall to 23,000, the lowest figure since 2006.

Due to the number of housing projects underway RICS expects housing starts to rise to 155,000 in England during 2015 compared to 125,000 in 2013 and around 100,000 in 2012.

Jeremy Blackburn, RICS head of UK Policy, said: “The political ambition to meet the UK’s housing deficit of 240,000 means that debates around planning, development and delivery will monopolise the pre-election period in the run up to May 2015.

“We’ve seen four housing ministers in this Parliament and there is no reason to think that housing won’t continue to be a political football in the next.

“What we need is certainty, clarity and confidence from government to keep us building homes.

“Reforms to Stamp Duty should underpin public confidence and lead to a greater number of housing transactions and we would now look to any future government to review council tax.”