Liquid error: wrong number of arguments (2 for 1) What's In Store For The Housing Market in 2014? | Marsh & Parsons Sales and Lettings Estate Agents London

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What's In Store For The Housing Market in 2014?

Fri 24 Jan 2014

WHO'D have thought, this time a downbeat year ago, that 2013 would be the year the housing market finally re-gained its mojo?

And yet, fast-forward 12 months, and a recovery is clearly well under way, with building society Nationwide just reporting that house prices across the UK surged by 8.4 per cent over 2013.

While much of the upturn has been put down to London and the South East, other areas are also seeing some big price increases.

In Manchester, for example, house prices have surged by 21 per cent over the last year.

Meanwhile, the number of mortgage approvals made to home buyers lifted to over 70,000 in November, according to Bank of England figures, marking the highest number of loans given the green light since January 2008.

New research out from Halifax also suggests activity will show little sign of slowing down in the coming months.

Some 51 per cent surveyed by the lender believe 2014 will be a good time to put a property on the market.

This marks the first time, since Halifax's regular housing market confidence tracker began nearly three years ago, that the proportion of consumers predicting the next 12 months will be a good time to sell a home outweighs those believing it will be a bad time.

The housing market's recovery has been partly put down to Government schemes such as Funding for Lending and more recently, Help to Buy. Funding for Lending has given lenders access to cheap finance on condition they pass the benefits on to borrowers, while Help to Buy gets borrowers with small deposits onto, or up, the property ladder.

The Funding for Lending has now been refocused away from households and towards helping businesses instead, which could have a calming effect on the market.

Another quietener could be when stricter mortgage rules are set to come in this April, under the Mortgage Market Review (MMR), to make sure there's no return to irresponsible lending, and that people only take out loans they can pay back.

That said, this effect on current predictions should be small, because lenders have been anticipating these rules for a long time, and adjusting their criteria accordingly.

So, with all these various factors in mind, economists and housing-market experts have been gazing into their crystal balls to see what's in store for 2014...

The Royal Institution of Chartered Surveyors (RICS).

The surveyors' body expects to see a further house price uplift, fuelled by a continued shortage of homes for buyers to choose from.

It predicts an 8 per cent rise across the year, with all areas of the country seeing increases, ranging from 11 per cent in London to 4 per cent in Northern Ireland.

Scotland and Wales are expected to see prices lift by around 7 per cent.

Simon Rubinsohn, chief economist at RICS, says: "Transactions will continue to rebound despite the withdrawal of support for household borrowing through the Funding for Lending scheme.

"Total sales across the country could reach 1.2 million during the coming year."

But Rubinsohn also believes mortgage costs are likely to edge up towards the end of 2014.

This will contribute towards a gradual slowing in the rate of house price inflation and "a more stable trend in transactions in 2015", he says.

The Council of Mortgage Lenders (CML)

The body believes the housing and mortgage markets look set to continue to see greater activity in 2014 but it adds that "an unbridled housing boom is unlikely".

The CML forecasts a rise in gross mortgage lending from an estimated 170 billion in 2013 to 195 billion in 2014.

Halifax expects house price rises in 2014 to be a broadly similar pace to those seen last year.

Overall, prices nationally are forecast to increase by between 4 and 8 per cent.

Halifax housing economist Martin Ellis says: "Mounting signs the recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence.

"This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand.

"We also expect the Bank of England bank rate to remain very low, helping to support low mortgage rates and, therefore, housing demand."

He says that while London has led the recovery, the pattern of increases is set to become "more broadly based" in 2014, with all regions seeing price gains. Marsh & Parsons The estate agent forecasts that prime London house prices will rise by between 5 and 7 per cent in 2014.

Peter Rollings, CEO of Marsh & Parsons, says: "London's housing market saw a substantial uplift in 2013, and we expect a similarly strong start to 2014 to drive an annual rise in prices but these won't be as spectacular as last year."

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