2013 will be different as there will be no distractions such as the Olympics
The UK residential property market is likely to experience further challenges in 2013 as the economic outlook remains depressed although some experts are predicting price increases.
This year is likely to end with either a fall or status quo among many UK property markets with only London bucking the national trend.
Brendan Cox, managing director of Waterfords estate agents, who operate within the Home Counties, believes that the year ahead will follow in a similar vein to 2012 but in his region he is predicting modest price increases of between 1.5% and 2%.
‘In our area we can report that prices did climb up slightly when compared to 2011, or they did at least remain stable in a couple of selective postcodes. Taking into consideration inflation levels and the ongoing banking situation where lenders are reluctant to lend, the year ahead is going to be very alike to the one we have just had,’ he said.
Experts also point out that 2013 will undoubtedly be different in the fact that there will be no distractions such as the Olympic Games and the Queen’s Jubilee celebrations, both of which are regarded as responsible for a drop in sales over the summer period.
Online estate agent Hatched’s director Adam Day thinks that without these distractions the housing market will settle and steadily improve in 2013.
‘Transactions will rise during the first six months, with house prices potentially climbing by as much as 2% across the year,’ he said.
However, he also warns that if there is an unexpected rise in interest rates, house prices will fall quite aggressively and, in turn, damage the chances of a full housing market recovery.
London is likely to continue to see a strong property market as international buyers continue to see the city as a safe haven for investment and this will keep prices high. The North/South divide is expected to stay although it might become more fragmented with hotspots areas that are doing well and other areas where the market is less resilient.
‘We are heading into 2013 with increased viewing numbers, while the number of new applicants registering with us is also up. This has lifted estate agents’ spirits and vendor and purchasers’ moods have lightened. There is a general murmur in the market place that there may never be a better time to move to the country in terms of value for money, and I believe next year we will see even more families flocking to the countryside, especially in commuter belt areas,’ said James Mackenzie who heads up the Strutt & Parker Country Department.
The economic outlook remains challenging, and forecasts for growth are still sluggish for the next two years. Mackenzie points out that this inevitably impacts the residential housing market.
‘It is hard to see any significant short term economic boosts for market growth across the UK. However, as confidence creeps up, so too will activity,’ he said.
Mackenzie believes the steady improvement in market figures is down to realistic pricing as buyers and sellers aim to find common ground in the market.
‘Buyers are not fools. They are educated, wise and know exactly what the last three comparable properties sold for because they most probably saw them. Vendors are realising that if they quote an asking price which sets the bar above reason, potential buyers won’t even come and see it,’ he explained.
He also pointed out that buyers are showing far more interest in properties that are offered in excellent condition.
‘Environmentally friendly, modern homes that require no work are replacing the Old Rectory as the new dream home as people’s priorities change. Eco-sensitive houses and properties that are extremely cheap to run with new energy saving systems in place will do particularly well in 2013,’ he said.
‘We will see increased demand from both ends of the market, that is downsizers looking for the perfect home to move into with no additional costs, and families looking to move up to the next run of the ladder,’ he added.