AS we say hello to another year, it’s the opportune time to look forward to what the housing market might have in store for us in 2014.
After all, many people will look to make a fresh start in 2014 by selling up and moving into a new home.
Here are some predictions from Tom Bridge from Stephensons Solicitors of what might happen in the coming 12 months.
1: Prices will rise across the board.
We’re always bombarded with news stories about house prices on the increase and 2014 is shaping up to be no different. RICS – the Royal Institution of Chartered Surveyors – said this week that all parts of the country would see prices rise, with the North West set for a 7 per cent jump. But they also pointed to the number of new homes being built, saying the expected 155,000 new homes next year would not be sufficient to meet the growth in population.
2. The gap between the London housing market and the majority of the rest of the country will continue to grow.
While house prices in all areas are on the up, in London they’re rocketing, leaving a wider divide between the North and the South. What does this mean for the home buyer? More people may gravitate to the North to buy cheaper housing as they’re increasingly being priced out of the London market.
3. The continuing effects of Help to Buy and Funding for Lending will improve access to mortgages generally.
The second phase of the Government’s Help to Buy scheme launched a couple of months ago, three months earlier than planned to help inject life into the property market and get people moving. Help to Buy is essentially a mortgage guarantee scheme, which will allow borrowers with a 5 per cent deposit to buy a property worth up to £600,000 according to their affordability. The Government will guarantee up to 15 per cent of the loan for seven years to allow the borrower to gain access to cheaper mortgage deal, by effectively having a 20 per cent deposit. That guarantee can be called in if the borrower defaults on their mortgage.
For those moving up the ladder, the fact that more people will be able to gain access to mortgages, will stimulate the market and get things moving.
4. Improving consumer confidence should mean more people looking to get onto the housing ladder.
The enhanced range of available mortgages, schemes such as Help to Buy and increasing confidence at the start of the year will also boost the property market in 2014. Consumers are becoming more confident in parting with their cash so we should see an upturn in people looking to get on the ladder.
5. Savers will invest in property.
Unless interest rates rise – and everything is there to suggest this won’t happen in the next 12 months – more savers may be tempted to invest in property as a means to potentially increase the return on their investment. This includes parents who might be more inclined to use their available funds to help their children to buy a property as well as downsizers who can release substantial amounts from their existing homes to buy smaller properties.