House prices seen rising 6% in UK as Nigerian market struggles into 2016

At a time when the Nigerian housing market is struggling with falling prices and an over-supply at the high end, the UK market is booming with expectation that house prices here will rise 6 percent in the next 12 months.

Analysts say the market situation in the two markets plus that of the US are reflections of the state of their economy and each country’s fiscal and monetary policy.

In Nigeria, the twin problems of oil price fall and naira devaluation have impacted negatively on the economy, leading to a significant drop in prices and demand for housing, especially at the high end.

In the US, the Federal Reserve has raised the interest rate and in the UK the historic low rate of 0.5 percent is expected to rise before 2016 is out. Both the rise in the US and the inevitable rise in the UK will have effects on buyers and sellers.

In the US, Propertywire, an online property journal covering over residential real estate markets worldwide, reports that the Federal Reserve has raised the interest rate and in the UK the historic low rate of 0.5 percent is expected to rise before 2016 is out, predicting that both the rise in the US and the inevitable rise in the UK will have effects on buyers and sellers.

2015 for the real estate sector in Nigeria has been a tough one and, according to Gbenga Olaniyan, CEO, Estate Links, “going forward, I am not as optimistic as I read in the papers; I see the market struggling through the next 24 months before we see a rebound.”

Conversely, Ray Clancy, editor, Property Wire, sees a 6 percent price rise in the coming 12 months, factoring in an interest rate rise and an extra 3 percent in property tax for buy-to-let investors and those buying a second home, adding that the stamp duty change due to come into force in April is expected to push prices up in the first three months of the year as those involved seek to avoid the additional tax.

“In the UK, this comes at a time when there is a severe shortage of homes for sale. Even though new home building is political priority, it takes time for them to filter into the system and right now there are just not enough properties coming onto the market,” Clancy notes.

Continuing, he says, “I am going to stick my neck out here and say that unless something is done to make it more attractive for older, retired couples, to downsize, the shortage isn’t going to go away. I live in the area of a town where almost everyone around me lives in three and four bedroom homes yet their grown up children no longer live at home.

“Quite a large number are single men, living on their own. I know that there is anecdotal evidence to suggest that this scenario can be found in almost every region of the country.”