Most home buyers 'predict prices to rise during 2016'

More than two-thirds of home buyers expect property prices to continue heading upwards during 2016, a survey has found.

Some 69% of home buyers surveyed for Sarah Beeny's estate agent Tepilo think that property values will continue to increase this year - and 29% said their biggest concern for the housing market in 2016 is that prices will continue rise at a rate which is unsustainable.

Nearly one third (29%) of home buyers surveyed think houses are priced too high and are becoming unaffordable to people on low and middle incomes.

%VIRTUAL-ArticleSidebar-property-guide%And about one in five (18%) people surveyed think that high house prices are preventing many people from being able to move up the housing ladder into a bigger property.

Across the survey, only 9% of home buyers think house prices are affordable for most people, with only 5% of people surveyed in London believing this.

Looking at home buyers' expectations for mortgage and other borrowing costs increasing, nearly one quarter (24%) of people surveyed believe that interest rates will not change this year, despite recent speculation that 2016 could be the year when the Bank of England base rate starts to move off its record 0.5% low.

But 22% of people expect interest rates to edge up by 0.25%, while 19% predict a 0.5% increase and 14% think rates could increase by 1%.

More than half (53%) of people surveyed believe there will be a housing shortage in 2016 and think more homes need to be built to sustain the market and keep prices level.

The survey involved more than 2,000 people aged between 18 and 65 years old from across the UK who have either bought a home in the last year, are in the process of buying or are planning to buy a home in the next 12 months.

Beeny said: "Understanding what consumers currently operating in the property market believe will happen is the best way to predict what is most likely to happen as they're the ones who make the choice to buy, sell or do nothing."

She said it is clear that issues such as housing affordability are "playing on buyers' minds and that many feel that homes are simply becoming unaffordable for the masses. A shortage of housing is also a common worry for many, which is further contributing to price increases in certain areas.

"This makes it clear that the Government needs to really step up to ensure the market remains stable and accessible to the majority, and its recent commitment to build more homes and provide further schemes to help first-time buyers onto the ladder is welcome news.

"However, these commitments need to be fully delivered and continually built upon to ensure the UK continues to be a nation where home ownership is the norm."

Figures released by estate agents on Monday showed that there are now around 10 house hunters for every property on the market.

The National Association of Estate Agents (NAEA) said that on average, there were 403 house hunters registered per estate agency branch in November - a figure which had jumped by 20% compared with October.

Meanwhile, the supply of homes shrunk back, to around 41 properties on the market per branch, from 43 the previous month.

The ratio of house hunters to the number of homes on estate agents' books means there are now around 10 prospective buyers registered for each property, the NAEA said.

Many economists have said that they expect house prices to continue to increase in 2016. They have said that schemes such as Help to Buy will take time to increase the supply of properties on the market, while at the same time fuelling demand.

Mark Hayward, managing director of the NAEA, said on Monday: "It's all very well planning to build houses, but we need to move to action and get and the bricks and mortar on the ground, if we're to solve the crisis we're faced with."

Prime Minister David Cameron defended his record on affordable housing this week as he launched a plan to build 13,000 new homes by directly commissioning developers to build on Government land.

The Government has insisted the move will see homes being built at a faster rate, with smaller building companies that cannot take on big projects able to begin construction on Government sites which already have planning permission.