Despite a general ‘wait-and-see’ attitude on the part of both vendors and purchasers, transaction and pricing levels suggest the 2012 housing market remained surprisingly resilient. The concerns of some commentators over the effects of the combination of a struggling economy, the second wettest weather conditions on record, the Queen’s Diamond Jubilee and the Olympic/Paralympic Games seems slightly misplaced.However, we must not be complacent. The national housing market remains fragile, with the exception of London. Consumer confidendence is understandably weak and affordability issues have been exacerbated by low levels of mortgage lending. But…as we move towards the end of January it is pleasing to be able to report on positive indicators which, if sustained, suggest we can be cautiously optimistic about a relatively buoyant 2013.
A number of lenders have recently announced plans to increase their mortgage lending in 2013. Recent data also suggests there has been a marked increase in first time buyer activity which, according to the Halifax, reached its highest level at the end of 2012 since the global crash of 2007. It is generally accepted (unforeseen events aside) interest rates should remain at their existing low levels for the year and the Government’s New Buy and Funding for Lending initiatives should help to increase transaction activity still further as pent up sales demand is released.
The RICS is even predicting that residential sales this year will reach their highest level since 2007. Furthermore, Rightmove announced last week that the level of property listed on their website was up 22% year on year, and that traffic to their website was also up by 27% over the first two weeks of January 2013.
London will again be the stand out performer in 2013 with sustained demand from overseas buyers and limited stock. The imminent new taxation of properties held within corporate wrappers, which many thought would cause issue will, I believe, be more of an irritant than a deal breaker for most buyers who will be more likely to simply restructure their mode of acquisition.
The continuing recovery will be gradual and there will be regional variations but the outlook is positive.