The latest news from Rightmove is not too positive. According to the property giant, sellers with property coming to the market in December 2012 have reduced their asking prices by 3.3% on average.
It’s not all doom and gloom at the end of the year though, despite the largest monthly fall that Rightmove have recorded, the overall view of 2012 is actually an increase of 1.4%. in asking prices.
Rightmove itself forecasts a national 2% rise in 2013, indicating a steady climb in market activity. This has been reinforced by our own Chartered Surveyors on the Property Surveying network, who indicate growth of between 1 and 2% in selling prices will be most likely.
One potential cause of this positive movement is being attributed to greater competition amongst lenders, who will steadily become more able to offer a greater range of mortgage products based on a wider range of criteria. (see our comment on the Council of Mortgage Lenders’ views on mortgage completions).
Already, cheaper mortgages have boosted first time buyer figures, with 216,000 able to take a first step onto the property ladder this year; the highest since 2007.
Others have attributed progress to an increase in optimism, as UK growth figures continue to stay in positive digits. With the recent news that the USA has narrowly avoided tumbling off a ‘fiscal cliff’, and thereby dragging closely tied nations with it, there are hopes this will continue apace.
The combination of a property supply remaining fairly static, relative to previous years at least, and an increase in persons who are likely to be able to purchase property, should result in an increase in property sales and prices.
Recent figures from the Halifax showed that the average price paid by a first time buyer in November was £139,921, which was affordable (ie. less than four times the average income of the area) in 39% of council areas, relative to just 5% in 2007. If this trend continues, the number of purchasers able to get onto the bottom rung of the market will increase, which will also have a knock on effect on current property owners; allowing them to move on.
This positive balance between supply and demand will need to become established and sustained over the middle and latter parts of 2013, in order for a further uplift in transaction volume and prices to continue to increase in 2013/2014. A lot rides, therefore, on the wider economic picture.
Overall it seems to be more a case of quiet confidence and steady recovery in 2013, than of bunting and street parties just yet, but the end of 2012 gives cause for careful optimism.
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