There is likely to be very little change in UK house prices in the next 12 months with the year seeing stability rather than growth, according to the new Halifax UK Housing Market Outlook for 2013. It predicts prices movements in the range of -2% and +2% and also that the Bank of England Bank Rate will keep interest rates at an all time low of 0.5% to the end of the year.
The lender points out that outlook for the UK economy and house prices remains less clear than usual and subdued economic growth, sustained high unemployment and pressures on household finances will constrain housing demand. However, the relatively low level of mortgage payments in relation to income should provide support for house prices and they are likely to be strongest in London and the South East. It adds that prices are likely to rise, albeit very slowly, beyond 2013 as the economy strengthens.
‘Conditions in the housing market have been largely unchanged over the past 12 months with little overall movement in either house prices or sales for the second consecutive year. This stability is remarkable given the poor domestic economic climate and the considerable uncertainty regarding the prospects for both the UK and world economies,’ said Halifax’s housing economist, Martin Ellis.
Quote from PropertyCommunity.com : “UK residential property prices are up by 2% year on year, the highest annual rate of increase seen in the month of November since 2007, according to the latest monthly report from Rightmove. Even with the effect of prices rising faster in London removed from the picture, prices are still up 0.2% year on year.”
‘Both demand and supply pressures in the market have altered little during the course of 2012, and this has been the key reason for the lack of direction in either sales or prices at a national level,’ he added.
Halifax’s latest monthly report shows that house prices increased slightly in November by 1% to take the average price of a home to £160,879. On a quarterly basis prices increased 0.7% but they are 1.3% below a year ago.
‘There has been very little change in house prices overall during the past year with the average UK price in November almost identical to that in November 2011. Both demand and supply pressures in the market have altered little during the course of 2012, and this has been the key reason for the lack of anything other than modest changes in house sales and prices at a national level compared with a year ago,’ said Ellis, adding, ‘Challenging economic conditions have constrained housing demand whilst low interest rates have helped to support affordability and demand’.
He also explained that there are now signs that the Funding for Lending Scheme (FLS) is helping to reduce mortgage rates and may be contributing to the recent pick up in mortgage approvals. ‘The FLS should help to ease credit constraints, resulting in some improvement in mortgage availability in 2013,’ he added.