West Wales Property View

What's Going to Happen to House Prices in 2012?

2011-12-07T17:02:00.011Z

This is one of the key issues facing many people who want to move or need to move. Unfortunately, the answer seems to be that we’re looking at static or falling prices with a low number of sales taking place. This applies to both Wales and to most of the UK. This is the conclusion from the latest Halifax price survey.

Further evidence comes from forecasts produced by the independent Office for Budget Responsibility (OBR). These accompanied the Chancellor of the Exchequer's Autumn Statement. The forecasts show that sales have been at comparatively low levels during the period of economic turmoil. This has been caused in part by lenders' caution when handing out mortgages, buyers' worries about their jobs, and sellers' unwillingness to reduce asking prices. The latest figures from HM Revenue & Customs showed that 76,000 homes were sold in October 2011, which was 1,000 more than in September, but still 3,000 fewer than in October 2010. It means that sales for 2011 so far have been 5% down on 2010.

The sluggish market was also in evidence in figures from the Bank of England, which showed that mortgage debt reduced by £9.1bn in the second quarter of the year. Housing equity withdrawal has been negative in every quarter since the spring of 2008, the Bank of England said, which was a direct result of very few transactions taking place. However, the OBR said that this would change in the next few years. It predicted that transactions would fall by 3% in 2011-12, grow by 1.5% the following year, but then surge by 20.7% in 2013-14.

Meanwhile, house prices will fall by 0.9% in 2011-12, dip by 0.1% the following year, then rise by 2.7% in 2013-14, and increase by more than 4% in each of the next three years. A week ago, the Centre for Economics and Business Research said the average UK home would increase in value by 3.2% in 2015. Earlier this year it had predicted that prices would go up by 4% in 2015.

So, it’s not all doom and gloom. The OBR forecasts that housing market activity will surge in 2013. It has said there would be a 20% rise in transactions in 2013-14, compared with the previous year. It has also predicted that house prices would rise at levels above inflation from the same year, reaching annual growth of 4.5% in 2015-16. The optimism is echoed in a Report by BNP Paribas. The firm’s annual Housing and The Economy Report, produced in conjunction with Professor Patrick Minford of Cardiff Business School, looks at the issues affecting the housing market across the UK and its prospects over the next five years.

The overall conclusions support our own view that it will still be difficult to sell property in 2012 but that the market will pick up steadily from 2013 onwards. However, it looks like there will also be a permanent change in the proportion of people owning their own homes. Renting will constitute a larger section of the overall housing market in the future.

Ideas to tackle the Housing Crisis

2011-10-25T17:03:00.001+01:00

The BBC News Website has an interesting summary of the latest ideas on how to tackle the current housing crisis. One of the alarming facts is that only 134,000 new homes were built in the UK last year (2010), the lowest number since the 1940s. The property sector (including housing building) drives many sectors of the Economy and things will not start to turn-round unless we can get property and construction going. You can see the article by clicking here.

Welcome

2011-10-25T13:39:00.001+01:00

Welcome to Runnett Property's new Property Blog. To those of you who aren't familiar with us, we are a family run property services business covering the whole of West Wales from our base in the main regional centre of Carmarthen. Our activities split into three main areas: letting and management of residential properties, residential property sales, and all aspects of commercial property. The Firm was started in 1997 and in the last 14 years we've developed extensive expertise in property issues and a deep knowledge of the local property market.

Since 2008 the property market has been going through difficult times and many of our clients have often asked for our opinion and advice on how we think the market will develop. They've also asked us to discuss their options for renting, selling and buying in current conditions. Some have suggested that we should produce regular updates. With this in mind, we've decided that the time is right to start a blog for both our clients and others who are interested in property matters here in West Wales.

We aim to make the blog both interesting and informative and we'll be posting a variety of news, views and analysis on not just the local market but also on the market across the whole of Wales and the wider UK. We also aim to include a range of features on interior design, gardens and lifestyle issues. Check back with us regularly to get the best informed view of property matters in West Wales. Enjoy!