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Expectations for the property market in 2014

It is good to hear that predictions for the UK property market in 2014 remain positive, with sellers reporting increased confidence and house prices expected to continue rising.

A good time to buy and sell

The latest quarterly Halifax Housing Market Confidence Tracker has found that for the first time since the survey began in April 2011, there are more people (59%) thinking the next 12 months will be a good time to sell than those who think it will be a bad time (39%). This gives a net balance of +12, which is much more positive than the -6 experienced in September last year.

This confidence is also evident amongst those who are looking to buy property, with 63% saying 2014 will be a good time to buy compared to 28% who think it will be a bad time, giving a net balance of +35.

Looking at those people who are considering buying and selling, 38% think the next 12 months will be a good time to do both, which is a big improvement over the 9% recorded by the survey a year ago.

Increased positive sentiment

“The recovery in the housing market during 2013 has resulted in a significant improvement in sentiment towards selling a property in recent months,” explained Martin Ellis, housing economist at Halifax. “This shift could provide a much needed increase in the supply of properties available for sale on the market during 2014, which would help to constrain upwards pressure on house prices.

“Whilst sentiment towards the residential property market has improved across the country, significant regional differences persist. The proportion thinking that it will be a bad time to sell continues to exceed those thinking it will be a good time in several parts of the country,” he added.

UK Housing Market Outlook

The Halifax also recently published its UK Housing Market Outlook for 2014, which found that the market is expected to continue to receive a boost from low interest rates and the improving economy. As a result, house prices are likely to continue rising in 2014 at a pace similar to that experienced in 2013.

According to Martin Ellis, house prices increased by 7% in the first 11 months of 2013 and are expected to rise between 4% and 8% nationally over the next 12 months.

Nevertheless, says the Halifax, there is little evidence of the excessive behaviour associated with a house price bubble, and factors such as the ongoing pressure on household finances and the likelihood of more properties coming onto the market are expected to place limits on the extent of property price rises.

RICS also predicts house price increases

The Royal Institution of Chartered Surveyors (RICS) is also predicting further growth in house prices in Scotland, and is expecting to see prices rise by around 7% over the year. According to RICS, this likely growth is the result of a growing gap between buyer demand and the availability of houses on the market.

RICS does however expect to see activity pick up still further, following the introduction of Help to Buy in Scotland earlier this year.

“This year we have seen house prices beginning to rise across Scotland and next year we expect to see more of the same,” commented Sarah Speirs, Director RICS Scotland. “We expect all areas of the country to see prices increase, however, putting the improving economic picture to one side, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market.”

“While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand and we expect the problem of insufficient supply of housing stock to be the main driver behind price increases over the next twelve months,” she added.

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