Experts view - What next for house prices?
Confidence in the housing market has strengthened from its record low at the end of last year, according to research by Zoopla.co.uk. The Telegraph asked a panel of economists and industry experts if they agree.
Simon Rubinsohn, chief economist at Royal Institution of Chartered Surveyors (RICS)
“I think that confidence has improved since the end of the year but it remains fragile and has a strong regional dimension. Confidence in London and the South East is more upbeat than in many other parts of the country, in particular parts of the Midlands and the North.
“Our headline forecast remain unchanged with prices projected to be 2pc lower in the last quarter of 2011 compared with the same period in 2010. However, there will be significant regional variation with London the only area to be slightly up.
“May still seems highly likely [for an interest rate rise] unless the activity takes a marked turn for the worse – with the ECB set to move this month and inflation continuing to push upwards it will prove difficult for the BOE to stick with its current position – however we only expect one more move this year taking the base rate to 1pc at end 2011 – there will be further tightening in 2012.”
Martin Ellis, head of housing economics at Halifax
“There are signs that both house prices and the level of sales have stabilised in the early part of 2011. This would be consistent with the evidence of improved confidence.
“Overall, we expect a modest 2pc decrease in house prices in 2011. Uncertainty over the economic outlook is likely to weigh down on housing demand this year.
“There is considerable uncertainty over the timing of the first interest rate rise. We expect it to be around the middle of the year but do not expect it to be followed quickly by further increases.”
Melanie Bien, director of independent mortgage broker Private Finance
“I find it surprising that confidence in the housing market has significantly risen since the end of last year. On the contrary, the soaring cost of living, fears over job losses and rising interest rates, seem to be making buyers and sellers sit on their hands and adopt a ‘wait and see’ attitude. The number of transactions is extremely low as a consequence.
“House prices are likely to remain flat at best this year but this national average will conceal significant regional differences. The north-south divide is set to become increasingly pronounced with prices rising in London and the south-east, particularly in the prime markets, while falling in the north, Scotland, Wales and Northern Ireland.
“Interest rates will start rising in the next few months but I believe this will now happen at the end of the summer – September, rather than May. The economy is simply too fragile and the impact would be so devastating for many home owners already struggling to make ends meet that I think a move will be delayed for as long as possible.”
Opinions are conflicting, but the general consensus seems to be that confidence in the market has strengthened since last year. Greene & Co. have experienced a positive end to the first quarter of the year and feel good about the year ahead.
Are property prices coming down?
Since the abolishment of HIP’s some interesting things have been happening in the property market. According to Rightmove “the market is starting to turn due to increased competition among sellers and fewer potential buyers”. This could be a great time to buy, as each day more properties are coming on the market and prices are also dropping. Our Managing Director, David Pollock had this to say about the current market situation.
“The London market is a different market place to the whole of England. London is in a bubble and therefore it is always a little dangerous to base house buying and selling strategies on whole of UK indexes. Having said that the abolishment of HIPS in the long run will be great for the London and UK market but without doubt there is going to be a period of adjustment. Will prices in London go up, go down or stay the same. Is now a great, average or poor time to buy or sell? The experts don’t and cant seem to agree. My advise is see property firstly as a home and secondly as an investment, its when you do it the other way round that things start to go wrong.”
We will have to wait until the emergency budget is announced to see the true effect on the market as many fear that capital gains tax could be increased but we wont find out until everything is revealed tomorrow.
Stamp Duty – good news for first home buyers
Good news for people who are looking to buy their first home this week, with the government announcing that first home buyers who purchase property under £250,000 will be exempt from paying stamp duty. This is a great benefit for first home buyers and it will be a great saving which they could possibly now add to their deposit or it will simply allow more people who may not have previously been able to enter the market to purchase a home of their own.
David Smith from the Times commented that “Alistair Darling’s Robin Hood coup in last week’s budget was the two-year stamp-duty holiday for first-time buyers of homes up to £250,000, paid for by a permanent increase in the duty to 5% on £1m-plus properties. Clearly, there will be mixed feelings about this.
Despite the skepticism, stamp-duty holidays work, as previous experience has shown. Provided the bureaucracy can identify who is a genuine first-time buyer — a divorced wife or husband who was previously a joint owner will not count — this should give the market a boost, which is why the housing industry has welcomed it.”
Stephen Brown, Director of our Crouch End shop has said that “if we start seeing banks lend more then this will be a nice saving. Hopefully the stamp duty saving should be good for first home buyers as this will give more money to their deposit.”
Either way you look at it this will help more people purchase their first home which is a good thing!
The FindaProperty.com house prices and affordability index
Some interesting news from FindaProperty.com’s October affordability index - house prices are rising, but affordability for first time buyers is deteriorating…
“It’s never easy to get on the housing ladder but until the summer we had been seeing a gradual narrowing of the affordability gap. This has led to a definite pick-up in first time buyer activity as people have taken advantage of improved affordability and the stamp duty exemption on properties priced under £175,000. With prices now rising and affordability tightening again it becomes even more important that the Government retain this beyond its end date of December 31st.” Michael Flynn, Director of FindaProperty.com offers his opinion on the findings.
Maida Vale defies the downturn
Have a look at the article from The London Paper.
House prices on the up
Following on from the news yesterday that mortgage approvals are 20% up, according to this article in the Times , house prices have risen for the first time since 2007! Could this mean we’re on our way to recovery from the financial crisis?
It certainly looks hopeful, but I I still thinks there’s a long way to go just yet.
House price trends
Just stumbled across this website about house trends. You can view the latest property prices and statistics and compare property prices by borough…it’s quite a useful tool if you’re looking to buy or sell at the moment. Have a look at the house trends website here.
