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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

House prices rises eyed as market 'over the worst'

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.’

14 comments so far. Why not have your say?

ken ward

Jan 15, 2013 at 01:43

"over the worst" you couldnt make this rubbish up could you? millions cant afford houses because these bastards have priced them so highly, we need a crash this year NOT rises.

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Dennis .

Jan 15, 2013 at 15:03

Can someone explain to me why rising house prices are a good thing?

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Rose G

Jan 15, 2013 at 15:19

It has been government policy not to build homes in the last 30 odd years, making demand outstrip availability of housing. Successive governments have done this and therefore we have very little house building since WWII.

We should see further increase in housing (health, education) demands when the Bulgarians & Rumanians decide to settle here.

House prices in the UK is not just unrealistic, it has been government led - UK residents not only pay for the house, the treasury get paid the stamp duty; which gets swallowed up, instead of using this money to build more homes.

During Thatchers reign, local authorities were not allowed to invest any money from the sale of council homes to build more homes. The whole thing is being led by corrupt governments who do not actually care about the electorate except every 4/5 years when they come out the woodwork to make promises which they do not have any intention of keeping.

We have parking wardens who in their majority are from the 3rd world. making us pay fines for parking - overwhelmingly, you will find very few UK residents/citizens taking up this very unpopular job. The Royal Mail service has been of quite poor quality also because of the people now being employed by it - it is not a job that has any perks, and the people who now deliver your mail, get paid more for delivering your junk mail, than the actual mail.

The erosion of trust between the politician and the electorate has not only increased over the years, but only reflects what is happening in the wider society.

Those doing the least get paid the most - how can a doctor saving lives be paid as little as 50-100K, yet those making electronic transfers/purchases of financial products get bonuses in their millions, even though the service they are providing to their clients is not only poor, and the entire financial services is haemorrhaging money in paying out fines for malpractice.

Politicians are in charge, and our world is determined by these rather dubious characters. Blair taking us to war in Iraq based on falseties; sending our soldiers to die in a country where no one (not the Russians, not the Brits, not the Americans) have a hope in hell of changing the way the men have shaped their lives to exclude women from meaningful lives - our politicians may not have created the problems, but we have been here before interfering in lives across the world because we have a megalomaniacal belief that we can compete with the big boys.

t

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Dislexic Landlord

Jan 15, 2013 at 16:39

you have to look at who is makeing the comment

Its Values ????

would a valuer say anything else there in the same company as Estate Agents

IM looking at the market every day and I dont see any change in House Prices other than down

Ive said this before when i look at a property I look at the Price it was valued at in 2007 and I knock 30% to 40% off the price

And I even found last year the Mortgage company Values still down valued

we are going no where fast

1st time buyers are just not there if there not there we have no market

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Cockney Dave

Jan 15, 2013 at 17:04

I am a potential first time buyer with a decent deposit, but at present because i have no debts or lending history i cannot even get a credit card.

I have been watching the market for many many years and know for a fact that if the prices do not go down then i will not buy.

Only thing propping up the market are those with huge amounts of capital who buy to let, and those who can still get the 100% loans for buy to let. They are forcing the rental prices up and the banks are happy as long as they get their money.

The government have constanly harped on about get the banks lending, loaned then cheap finance to lend and nothing has happened. The bansk simply bought government bonds or held onto the money, so technically the government loaned cheap money (our tax money) to the propped up banks who are saving the money to prop up the balance sheets and refuse to lend it on. So my tax is going where?

Its a joke, and i think with the track records of RICS and all the banks quoting what will happen in 2013 is a load of tosh, they dont know, neither do i, but they try to remain positive to encourage people like me to get in a debt before the crash so they do not lose, thats the grass root of it.

Again, another pointless story...why o why do i still bother reading citywire?????

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Alan Tonks

Jan 15, 2013 at 17:08

Well I thought it was the economists who no longer existed in the real world and I see the RICS have joined them.

The property market has never collapsed in the way it should have. That’s because it has been supported by an electronic machine, which pours out funny money.

This is apart from the stupid 0.5% rate, which only incompetent would have initiated in the first place.

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Jon

Jan 15, 2013 at 17:37

Alan is right. House prices remain artificially high whilst interest rates are held artificially low. This false market cannot continue for ever.

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DirtyHarry

Jan 15, 2013 at 17:59

The housing market can't be allowed to rise. It is being supported by taxpayers on an artificially low interest rate subsidised by a falling pound value. In real terms house values continue to fall with the pound - relative to currencies that are not being forced to fall by indebted governments.

The only reason the government has supported the housing market to this extent is to avoid having to bail banks out further - due to their asset negative housing loan books.

The main target for the government is to keep inflation down so expect unemployment to maintained high and welfare to be gradually reduced.

With this background average house prices are going nowhere positive for some time.

People with no money do not create inflationary demand.

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Guy Holland

Jan 15, 2013 at 20:36

RICS are a self interested organisation and i would not have any faith in their forecast. They protect their members to the detriment of the market.

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DirtyHarry

Jan 16, 2013 at 09:20

I think its closer to the truth that the RICS attempt to protect the property market as they are so closely linked to it in most of their disciplines. Much the same way that the legal profession protects the legal system to ensure maximisation of member employment and pay levels.

The RICS has much less influence than this and when accumulating sentiment from its members its not difficult to see why every member would wish to see the market that they try to earn a living in improve.

I'm not sure how this is to the detriment to the market and whether it is thought that market support is detrimental to the wider economy.

Maybe a few first time buyers get lured into a market that still has some way to fall however the main market manipulator is the government subsidy paid by taxpayers in maintaining an unsustainably low interest rate.

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Dennis .

Jan 16, 2013 at 10:14

Perhaps RICS should become the next Libor scandal - is there any difference?

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DirtyHarry

Jan 16, 2013 at 12:44

Fraud can occur in all areas of business where profit can be made. As with LIBOR its not so easy to cover up fraudulent activity in a declining market whether its money or property.

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Dex

Jan 22, 2013 at 21:21

Rising house prices are fine if you have a house. I'm on the ladder but what chance have my kids got? There are no first time buyers because they can't compete with investment buyers. I'm not against anyone making a buck but the primary purpose of housing is to live in not to invest in.

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Dislexic Landlord

Jan 22, 2013 at 21:49

Dear Dex

as a long time investor i can tell you FTB will always win over a BTL Landlord

normaly

FTB will get better deals in the years to come its all about a cycle of events

FTB will buy with there hearts and there budget Landlords only buy for profit

At present Landlords have it there way but the tables will turn

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