16th December 2013
As the UK property market recovery gathers pace the average UK house price could break through the 3% stamp duty bracket in 2014 driving the cost too high for many aspiring buyers writes Philip Scott.
Property website Rightmove, forecasts new seller average asking prices to jump by up to 8% next year, unless more property comes to market.
The website, which has witnessed, a 21% year-on-year increase in traffic says current trends indicate that the housing market is in on track to build further on 2013’s momentum. Transaction levels in England and Wales are up 13% so far in 2013 compared to 2012 and, with the release of some pent-up demand, Rightmove forecasts a rise in average new seller asking prices of between 6% and 8% in 2014.
The group found that the average asking price, this month was £241,445, a drop of 1.9% or £4,782 over November, which represents the smallest December fall in seven years. But a mere 6% rise from that level would see the average asking price leap to £255,931 and with it the stamp duty charge from 1% to 3%.
Miles Shipside, Rightmove director and housing market analyst comments: “There’s a listing gap to fill. While sales transactions are up 13% so far in 2013, the number of newly listed properties is only up by 2%. To help mitigate the upwards pressure on prices it is important that home-owners who have a move on their minds make it a new year’s resolution to spring into action. After six years afflicted by the credit-crunch, there’s a definite window to move up or move on in 2014 before the market’s usual pre-election pause in early 2015. A good and plentiful choice of property for sale would limit sellers from getting over-ambitious with their asking prices and result in a national average increase closer to 6%. It would also give those who are buying a better chance of finding their dream home at a more affordable price.
“As the momentum of recovery increases, areas with the largest shortages of fresh property supply are likely to see more substantial price rises, with the South East among the regions where listings are most scarce. The strength of the market recovery will remain patchy however, with average incomes, employment and regeneration levels having a major say both north and south. Overall, agents in even the more depressed parts of the UK say they can see light at the end of the tunnel, though they also observe that there is a lot of stale stock in these slower moving areas to be cleared before prices can rise.”
Rightmove’s latest survey of more than 40,000 potential home-movers shows a greater degree of certainty in the housing market specifically. Four in five, at 79%, of home-movers predict higher prices by the end of 2014, the highest proportion recorded in the five years that the portal has run the survey. But as well as the motivation to move, buyers also need the means and with the thawing of credit conditions resulting in the highest lending levels since 2008, this piece of the recovery puzzle also seems to be in place. As lending restrictions continue to ease, Rightmove forecasts transactions to increase by around 10% in 2014 in England and Wales taking the total number to around one million, the highest since 2006 and up from an estimated 900,000 in 2013.