The local and regional residential market in 2012 was static in terms of prices – the Land Registry report that nationally prices were up by 1% in the year to November 2012. Supply of property has been generally quite good and matched demand. House purchase activity was robust even at the end of 2012 even though the economy barely grew over the year. This has been an improvement over all price ranges although there was proportionately more activity in the higher price ranges. We have seen some first time buyers returning to the market however and even some sales on a buy to let basis.
Most forecasters suggest there are there are grounds for optimism that the market recovery which began in 2012 should continue in 2013, reinforced in part by Funding for Lending scheme effects. This reduces the funding pressures on Lenders hopefully enabling them to be more flexible on lending. The global economy remains challenging however but the risks associated with the Eurozone crisis appear less critical than at the start of 2012 thanks to the actions of the European Central Bank and European policy-makers more generally.
Property listing website Rightmove report signs of ‘green shoots’ as property coming to market up 22% year-on-year and Rightmove traffic up by 27% over the first two weeks of January as well. This together with increased confidence among sellers to come to market – seven out of 10 are reported as ‘discretionary movers’ outnumbering forced sale drivers such as the ‘three Ds’ of death, debt and divorce. They perceive an improving market sentiment underpinned by growing confidence among property investors as 74% of professional landlords expect to add to their portfolios in the next 12 months.
For ourselves 2012 was exceptionally busy. We welcomed many new clients as well as new surveyors and staff. Part of December was spent canvassing opinion from local agents. Most of this agreed with our own opinions that 2013 is unlikely to see measurable increases in value but stability can be seen as a good market trend. All agents report increasing levels of market interest with buyers and sellers both coming to the market in greater numbers.
The RICS suggest a 2% increase in prices for 2013. Halifax comment “We expect continuing broad stability in house prices nationally in 2013 with prices likely to end the year at levels close to where they begin”. Nationwide do not commit themselves to a figure but also suggest the market will remain largely unchanged.
We don’t disagree.
RICS comment: http://www.rics.org/uk/knowledge/news-insight/press-releases/house-prices-to-rise-two-percent-in-2013/
Land Registry comment: http://www.landregistry.gov.uk/public/house-prices-and-sales
CML comment: http://www.cml.org.uk/cml/media/press/3394