30 January 2014
After years of struggling, the UK housing market finally took off again last year as the economic outlook became much brighter and the unemployment rate dropped significantly. But is the upward trend set to continue?
What the experts say
The general consensus of opinion is that house prices will continue to grow in 2014.
Miles Shipside, director of property website Rightmove, believes they could rise by as much as 8%, which would lift the average asking price into the 3% stamp duty threshold of £250,000. The Royal Institution of Chartered Surveyors is also predicting an 8% increase in prices nationally.
Halifax expects a rise of between 4% and 8% if the economic recovery continues and interest rates remain low, while housing market commentator Henry Pryor is anticipating a 5% rise.How the regions will fare
Despite the housing recovery, there have been some marked regional differences in property prices. Across the UK as a whole, prices rose by 7.5% last year, according to Halifax, but in London they went up by more than 10%. In other areas of the country growth wasn’t so strong, especially in parts of the north and west country.
Rightmove expects activity to be very localised this year, with prosperous cities such as Bath and Oxford pushing up regional averages. Leeds, Manchester and York are expected to be the best performing northern cities. Others are predicting that the Cotswolds, Cheshire, Leamington Spa and Stratford-upon-Avon will have a particularly strong year. Estate agent Savills thinks prices in Greater London will rise by 5%, while Scotland will only see a 1% increase.A good year to move?
With confidence returning to the housing market, it could be easier to sell your home in 2014 than at any point in the past six years. More first-time buyers are taking advantage of Government schemes such as Help to Buy and NewBuy to get a foot on the property ladder, so demand for homes is growing.
The Halifax Housing Market Confidence Tracker indicated that more than half of homeowners were confident that this year will be a good year to sell their home, with those in the North East the most optimistic.
The main reasons for people putting off buying a property include job security concerns and not being able to raise a big enough deposit, but it’s still a good time for buyers because interest rates are so low.Interest rates
Many consumers are concerned about the prospect of rising interest rates, which could see some people’s monthly mortgage payments shoot up. The Bank of England said it wouldn’t consider putting up rates until unemployment fell to 7%, which it didn’t envisage happening until 2016. But after the most recent jobless rate plummeted to 7.1%, the Bank’s governor Mark Carney moved to allay fears, saying that an interest rate rise is not imminent.
Paul Broadhead, head of mortgage policy at the Building Societies Association, said: “It is understandable that consumers are wary about a rise in interest rates in 2014, but unless the pace of economic recovery picks up considerably, it is unlikely we will see the bank base rate rise over the coming 12 months, and when interest rates do rise, it is likely to be gradual.”
Copyright Press Association 2014