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House Price Trends in 2013


Reports on the property market as the year closes reveal that 2012 was yet another year when frustrated home owners up and down the country saw a continuation of negative equity and potential buyers were bound by tighter mortgage lending restrictions.

The overall negative picture has regional variations however, with some areas faring better than others and a cautious sense of optimism for 2013 in some parts of the country.

Unsurprisingly, London has been relatively unaffected with some boroughs (notably Westminster) seeing an incredible 15% rise, closely followed by Kensington & Chelsea and Islington.  In a survey conducted by Savills Estate Agents (and reported in the weekend press of December 15/16th) other areas in the country also have cause for optimism, though not to London levels.

Savills’ survey shows that Brighton & Hove, Wokingham, most of Surrey, Bath & northeast Somerset, York and the Nine Elms area of London have seen 12-month price growth based on a number of criteria.

The north and north-east however have experienced the greatest property price falls, with the northwest, northeast, Yorkshire & Humber regions seeing values fall by 3%.

So what’s ahead for 2013?

Certainly government transport improvement initiatives will aid enhanced property values in certain areas.  Upgrades to the A1, M25 and the Kingsteignton bypass in Devon for example  and a Northern Line extension to Nine Elms and Battersea will give prices a boost in these areas.  (The Northern Line extension is part of wider plans to regenerate the Vauxhall, Nine Elms and Battersea areas).

So what is ahead for hard pressed homeowners and those who would like to make that all-important step on to the first rung of the housing ladder?

Certainly the forecast isn’t too optimistic according to estate agents and property consultants who were canvassed, predicting that house prices will remain static.  There are further predictions that prices will gradually increase in the following years but that the increase will be minimal once inflation has been taken into account.

The building of new homes isn’t expected to significantly increase next year either.  Developers are often able to offer mortgage deals which can generate some stimulus.  It’s thought that the rental sector will see a greater demand next year as many buyers will still be unable to afford to buy, though they may face rental increases as demand outstrips supply.

Predictions though are just that — and some of the forecasts from last year proved to be a little different 12 months later.

Steep falls in house prices weren’t as widespread as expected, but what is certain is that when the statistics are analysed, the ‘averages’ conceal the regional variations. 

One forecast expected to remain unchanged is that the housing market will remain polarised with a north-south divide in which pockets of affluence are found especially in the south where buyers are less reliant on mortgage funding for home ownership.

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