Will 2016 be the time to buy a home in the UK?

Will 2016 be the time to buy a home in the UK?

The property market has been strong for some time now. After seeing a fall in prices some years ago that almost crippled British property, the sector has grown resolutely year after year, even surpassing records and peak prices across the course of the last two years. However, even with the power that the market has, it can be hard for people to know when is the right time to buy a home. 

So, with 2015 coming to a close as another strong year for the property market, we take a look at what can be expected in the months and years ahead, and we ask if 2016 will be the time for those who don't currently own their own property to get onto the housing ladder at long last. 

Capital gains

Short-term capital gains can be a good indicator of how your property is going to perform in the long run, and can be a solid green light when it comes to deciding whether to buy or not, at least if the outlook looks good. 

In 2016, this is the case, with forecasts suggesting that prices will continue to grow in the coming year. Crucially, experts are even predicting that in the case of an interest rate rise, which has been hanging over the market now for two years, the sector would remain strong and continue to rise, allaying fears that a higher base rate could damage the market. 

According to the latest report from the Royal Institution of Chartered Surveyors (Rics), the year ahead is set to see the price of property increase by anywhere between three per cent and eight per cent, which indicates that it has strong potential, and gives people peace of mind that even in a period where it becomes more expensive to buy, the market will be resolute and continue to grow in a positive way. 

Long-term strategy

Of course, short-term forecasts can only show you what to expect over the course of the next few months, as opposed to the years ahead, where you can see if it really is worth buying to make money through returns for years to come. Thankfully, long-term predictions towards the end of 2015 seem to suggest that there is still much growth to come in the market, which indicates that next year will be the ideal time to buy to make your money work for you. 

According to Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA) reports, the next decade is going to be very strong. They said that between the end of 2015 and the end of 2025, the price of owning a home in the UK will grow by 50 per cent. 

For those who are looking for a good way to make money as part of a long-term investment, capital gains could really be the way forward. For this reason, purchasing a home in 2016 is one of the best ways to start making your money work for you moving forward, especially with such impressive growth still possible in the market. 

Less competition 

One of the biggest problems potential buyers have found in the market over the last few years has been the competition among those trying to purchase homes. The supply and demand imbalance can lead to bidding wars and inflated prices, which often leaves people priced out of the market and unable to buy their dream home. 

However, one of the biggest causes of this competition could be about to slow down in the new year. The rate at which landlords have been buying homes to let has been accelerating for the last few years, but the government's new stamp duty levy in 2016 is likely to see the number investing in homes to let falling. 

What will this mean for buyers? It should, in theory, mean that there will be fewer people going for each home that comes up for sale, and buyers will not have to compete with professional investors, making it both easier and cheaper to get onto the property ladder in 2016.