Forecast of the UK property market from the Halifax Bank

Bank Halifax reports that property prices in the UK will grow in 2014 at roughly the same rate as in 2013, reaching 8% year on year. In addition, significantly increased the number of transactions in the real estate market, which is likely to exceed the value of 1 million over 2013, what will happen for the first time since 2007.

Further economic recovery and low interest rates will support the housing market, but a number of factors, including the pressure on household budgets due to the slow growth of wages, will limit the growing prices, which, in turn, will allow to avoid a bubble in the property market in the UK.

While in 2013, only property in London and the South East of England saw a significant increase of prices and the increase in the number of transactions in 2014, this trend is expected in the regions. Forecast for 2014 promises as prices rise, and the increase of the quantity supplied to the market of real estate, which in turn will cause a significant recovery of the regional real estate markets in England, Wales and Scotland. However, the potential small increase in interest rates by the Bank of England, as well as too high prices relative to income due to the end of the year to alleviate the pressure on the market.

Indicators of real estate market of England was stronger than expectations in 2013. Strong demand based on the global programmes of the government and seriously feel the lack of supply provided the market price growth unseen since the 2008 crisis.

In 2014, the expected decline in unemployment in the UK, which also have a positive impact on increasing the trust of buyers to the housing market in the UK. In addition, the assistance of the UK property market will have a low interest rate of the Bank of England, which will either remain unchanged or will rise only slightly. Low interest rate will allow buyers to get a mortgage on more favorable terms, which accordingly will increase the demand for housing not only those who buys real estate for the first time, but from families who are willing to improve their housing conditions by moving to a new home.

The limiting factor on the too rapid growth of prices in the real estate market will be new deals on the secondary housing market that will begin to appear in response to substantially increased prices.

Given that today’s average prices in the property market in the UK is still 12% below its pre-crisis ( up to 2007) peaks, the property market has good potential. Today the average property is 4.8 annual income of the average Briton, which is significantly below the 5.8 annual wages needed by the average Briton in 2007, to buy a house.

® Alice Morgan. 25.12.2013.