First-time Buyers
House prices rise 7.5%
Average UK property prices increased by 7.5% during the course of 2013 according to Halifax.
The Halifax House Price Index has revealed that average UK property values fell slightly by 0.6% in December, but ended the year 7.5% higher than a year previously, at £173,467.
Halifax has predicted house prices will increase by between 4% and 8% in the coming year, broadly similar to the rise over the past 12 months.
Housing economist at the UK’s largest mortgage lender, Martin Ellis said rising house prices would encourage more homeowners to move this year.
“Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence over the coming months. This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand.
“Nonetheless, continuing pressures on household finances, as earnings again fail to keep pace with consumer price inflation, are expected to constrain demand. The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home.
“This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply. Indeed, our consumer confidence research shows that there has been a significant improvement in sentiment towards selling in recent months. These factors should help to curb the upward pressure on prices.”
Andy Hatoum, co-founder of property search engine Placebuzz.com, said:
“These latest (Halifax) figures show just how tricky it is to gauge exactly where the property market is on its road to recovery.
“Nationwide’s last figures showed a 1.4% rise in property prices in December, while Halifax reveal a 0.6% decline, which is what we would typically expect to see as activity drops off before and over the festive period.
“The difference between now and 12 months ago, when we were seeing this type of conflicting data, is that at that time there were very few new properties coming onto the market and very few people buying.
“Now buyer confidence is back with a vengeance in many parts of the country, fueled by a continued supply of cheap mortgages and a more buoyant economy, and it’s only a lack of supply that is holding them back.
“The slight worry is that mixed in with this confidence is a degree of fear, especially amongst first time buyers, that if they don’t take the plunge now they will be left behind as lack of supply and buyer demand drives prices higher and out of reach.
“The next few months are going to provide a crucial indicator as to where we are in the housing market cycle.
“The market is building up a head of steam but there will be concerns that property prices are starting to rise at an unsustainable rate, especially in London and the Home Counties.
“The hope is that we will see more steady growth at the start of 2014 supported by a much stronger supply of new properties coming onto the market.”