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What will rising house prices mean for the construction industry?

What will rising house prices mean for the construction industry?

UK house prices are expected to rise by six per cent next year, according to new statistics.The 2016 Housing Forecast from the Royal Institution of Chartered Surveyors (RICS) predicts that this will be the average increase across the country, but what will this mean for construction firms?With more money being invested in property, this could see builders reaping greater financial benefits, but it could also result in construction businesses being unable to help with building the affordable housing that Britain desperately needs at present.Jeremy Blackburn, head of UK policy at the RICS, commented: "Ramping up housing supply is positive, but homeownership should not be the only game in town."A mix of market and rented housing is required and starter homes should not be seen as the panacea to solving the housing crisis, but as forming part of a larger mix to meet the wide range of housing need the country is crying out for."According to the forecast report, the continued shortfall of affordable homes is set to keep pushing property prices higher, presenting challenges to those trying to get a foot on the housing ladder, as well as constructors themselves.Despite this, the RICS has predicted that there will be an increase in the number of home sales in 2016, with the organisation expecting them to climb to between 1.25 million and 1.3 million from this year's total of 1.22 million.East Anglia is expected to the region with the highest increases in house prices next year, at an anticipated average of eight per cent. At the other end of the scale, rises in the north-east are predicted to be the smallest, at around three per cent.With more people wanting to buy their own homes, whether it's to inhabit the property themselves or as part of the buy-to-let market, this suggests that there could be an increase in opportunities for construction firms.It is also hoped that the government will announce new initiatives in 2016 that will allow a greater number of new homes to be built affordably in the near future. 

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