Housing Market to improve in 2013
The housing market is expected to improve strongly in 2013-14, with a 20 per cent increase in transactions, the Office for Budget Responsibility (OBR) said yesterday.
An upward trend is expected to start developing in 2012-13, when 1.5 per growth is expected, according to the OBR’s forecasts which accompanied the chancellor’s Autumn Statement.
Recent figures from HM Revenue & Customs show that 5 per cent fewer houses have been sold in 2011 than in 2010 and they are still at around half the level they were before the 2008 credit crunch caused the housing market to plummet.
A number of factors have contributed to a fall in house sales, including economic uncertainty, mortgage lenders demanding high deposits, pressure on incomes, and high unemployment.
The OBR also said yesterday that it expects house prices to start showing a steady increase in 2013, reaching annual growth of 4.5 per cent in 2015-16.
However, they are expected to continue to fall by 0.9 per cent in 2011-12 and 0.1 per cent in 2012-13.
Recent reports from property websites Zoopla and Rightmove confirm the slump in house prices.
Zoopla revealed that 40% of the homes it currently has for sale have had their asking prices cut, while Rightmove said that the average asking price of newly marketed homes fell by £7,528 to £232,144 this month.
The north-west region experienced the biggest fall in house prices last month according to Hometrack, with a 0.4 per cent decline.
On average, house prices fell 0.2 per cent across England and Wales in October, according to Hometrack’s latest monthly housing survey.
The company said that the weak UK economy and the eurozone crisis had caused fewer new properties to come onto the market, while sellers were reducing prices in an effort to secure a deal before Christmas.