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House prices rises eyed as market 'over the worst'
House prices remained steady in December, boosting the outlook for 2013, according to chartered suveyors.
by Michelle McGagh on Jan 15, 2013 at 00:01
The Royal Institution of Chartered Surveyors (RICS) has said ‘we are over the very worst’ of the house price slump and is predicting house prices to rise in 2013.
RICS reported that last month 24% more surveyors across the country predicted property transactions to rise than fall over the next three months. This confident outlook is matched by a belief that some parts of the country may be over the worst of the property slump.
House prices in December were steady and RICS expects prices to rise 2% during 2013. Surveyors are no longer taking a negative view of the price outlook for the first quarter of 2013, the first time that further drops have not been predicted over a three month period since the summer of 2010.
Over a 12 month outlook 48% more surveyors believed house prices would increase. The number of homes coming up for sale remained stable in December as did the demand from would-be buyers.
In December 12% more surveyors reported an increase in new buyer enquiries, a trend that has continued in a positive direction for the past four months.
Although London continued to buck the overall trend, witnessing increases in prices in December, prices in the West Midlands stabilised and did not record a drop for the first time in over two and half years.
The North East and Wales continued to see house prices fall.
The positive outlook for the housing market has been boosted by the government’s Funding for Lending scheme. It has made £80 billion accessible to lenders in the hope of kickstarting the economy. RICS said the pick-up in new buyer enquiries reflected the decrease in fixed-term mortgage rates on two and five year 75% loan-to-value loans.
'These improvements are being underpinned by the marked reduction in UK banks' wholesale funding pressures. This is partly attributable to the Bank of England's Funding for Lending scheme, though recent foreign central bank policy responses have also indirectly played a role,' said RICS.
Peter Bolton King, RICS global residential director: ‘Our members are predicting that transaction levels will continue increasing in many parts of the country and it may be that we are now over the very worst.
‘That said, more still needs to be done to ensure potential buyers can access the market at every level. Alongside this, there is still a clear need for more homes to be built.’
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