UK housing market set for brighter 2013

UK property

Two new reports out today which examine Britain’s housing market paint an optimistic picture of the market over the coming 12 months.

Property website Rightmove has registered a 22% increase in the number of properties being added to its website this month, compared with the same time last year. The company notes that, although this is still down 37% on five years ago, before the full impact of the financial crisis, it is the highest level recorded at the beginning of a new year since 2008.

Underlining this apparent uptrend, there seems to be increased confidence among sellers to come to market as seven out of 10 of those intending to put a property on the market in the next 12 months are motivated by discretionary factors rather than forced sale drivers such as debt, divorce and death.

There are also signs of greater interest on the part of buyers, with Rightmove’s traffic in the first two weeks of 2013 up by 27% compared to the same period a year ago.

Figures show that sellers are taking a pragmatic approach to pricing, as asking prices in January have risen by just 0.2% (approximately GBP440) from last month. Compared with January 2012, prices are 2.4% higher.

Rightmove director and housing market analyst Miles Shipside commented that sensible pricing will help buyer affordability, one of the factors needed to help warm up the market and encourage a recovery from the freeze in transaction volumes.

Meanwhile, the Council of Mortgage Lenders (CML) has said that greater availability of mortgages at cheaper rates in the final quarter of 2012 led to “robust” house purchase activity and this is expected to continue over the coming months.

CML chief economist Bob Pannell noted that lenders are currently facing few funding pressures, partly because of the government’s Funding for Lending Scheme (FLS) which was officially launched at the start of August 2012 and is designed to boost lending to households and growing businesses.

Officials expect FLS to support activity in the housing market by ensuring the availability of credit and lowering its cost.

Pannell said that the CML is now more positive about the housing market and the wider UK economy than it was a year ago.

According to the organisation, which represents banks, building societies and other lenders, gross mortgage lending in 2012 totalled GBP143bn, up from GBP141bn in 2011. This year gross lending is forecast to reach GBP156bn.

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