Property experts and economists have predicted that the 2013 residential property forecast for the UK is going to remain much the same as last year.
This is good news for all property investors, who are able to get finance, but not welcome news for struggling first time buyers as the UK residential property market remains flat and mortgages are still not any more accessible, despite the emergence of some great Buy To Let Mortgages for investors.
Mainstream mortgage lender, Halifax, stated in December 2012 that it expected little change in 2013 for the prices of residential property and although the outlook remains more uncertain than usual, it is still predicted that before the end of next year residential property price margins will remain within -2% and 2% of the figures seen throughout 2012.
Halifax’s housing economist Martin Ellis said: “We expect continuing broad stability in house prices nationally in 2013. Prices are again likely to end the year at levels close to where they begin with the market continuing to lack any genuine direction, in addition, the escalating energy costs and minimal wage growth would restrict home buyers further.”
In the third quarter of 2012, the level of first time buyers reached its highest peak in three years. This was still a huge drop compared with the number of first time buyers recorded in 2006 and 2007.
It is suggested that just 26% of a borrower’s take-home pay will be taken by mortgage repayments due to low interest rates; this has dropped significantly compared to 36% over the last three decades.
Unfortunately, restricted mortgage availability will continue to force more would be first time buyers into rented accommodation which will result in further growth in the UK Buy-To-Let sector.
In November 2012, residential property prices rose by 1%, taking the average cost of a residential property in the United Kingdom to £160,879 (GBP).
This figure is still 1.3% lower than property prices were in 2012.
Residential property prices in the three months leading up to November 2012 saw a drop of 0.7% on the previous quarter.
Howard Archer, chief economist at IHS Global Insight commented; “While an impressive looking rise in itself, this has to be put in the context that residential property prices had fallen in each of the previous four months including a drop of 0.1% in October. Recent signs of a modest improvement in housing market activity and the likely increasing beneficial impact of the Funding for Lending scheme underpin our belief that house prices will broadly stabilize. However, we suspect that any significant, sustainable turnaround in residential property prices is still some way off.”