You may have seen an interview over the Christmas period with Alan Kirkman of Tudor Estates in Southend. He was being interviewed by the BBC who were following up a report by the Halifax that house prices had risen by over 14% in Southend during 2012.
Mr Kirkman was highly professional and said that, whilst the market in Southend was good, it wasn’t that good! This rather dampened down the thrust of the story.
Naturally as we enter a New Year there are a plethora of predictions and surveys purporting to give a view on the housing market. Some of these are anecdotal, others are based on a range of differing criteria such as asking prices, Land Registry data, surveys of members, lending information etc. Often the “sample sizes” are small and statistically insignificant.
The NAEA has revealed its predictions for the UK property market for 2013, saying that house prices will not go up and that first-time buyers will continue to struggle.
Hometrack is predicting much the same scenario, saying house prices will fall 1% this year. It believes house prices fell by just 0.3% last year, despite price rises in 20% of the country – and particularly in London. It says prices in the capital are now 10% higher than at the peak of the market in 2007.
Hometrack thinks London will continue to buck the trend this year, with prices rises of 2%.
Hometrack is also forecasting transactions to rise this year to 912,000, with cash buyers accounting for 35% of purchases. It believes there are more investors buying with cash than with a buy-to-let mortgage.
New NAEA chief executive Mark Hayward, who took up his post on New Year’s Day, cautioned against speculators predicting price surges, particularly in the South-East, suggesting the biggest challenge this year is for the market to adapt to the reality of the economic situation.
Hayward said: “I don’t believe we will see a surge in house prices during 2013 as some speculators have suggested. The market will continue to recover from historic lows since the recession, but that recovery will be slow and painful for many home owners, particularly those outside London and the South-East.
“In 2013 our big challenge is to improve the level of housing supply in the UK. Much more needs to be done by the Government to up the levels of new homes being built.
“More also needs to be done to support first-time buyers, partly by encouraging lenders to offer products to support those seeking to purchase their first home.
“Transactions will likely remain suppressed at this lower end of the market as many prospective buyers do not yet have the confidence to borrow.”
He added: “The north of the UK continues to struggle to keep up with the modest housing recovery in the south, and 2013 will see this gap widen.”
Whilst speculating about house prices and transactional volumes sells newspapers and makes headlines it is a simple fact that, whilst affected by national factors such as interest rates, the UK housing market is really a series of local markets where local factors make a huge difference to the activity and performance. Employment, transport links and schooling are key with any changes in these or the demographics of the area often impacting on house prices and transactional volumes.
It is vital therefore to seek local professional advice when thinking about a property transaction and that the opinions provided are backed up by relevant local information and experience.
If you are thinking of selling, buying, letting or renting in 2013 the local and experienced teams at Sansome & George are here to help.
