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UK Property Forecast 2014

For the past few years, many have experienced a tough going with the UK property market. One that has hit a few nails on the head with the reality of purchasing properties at extortionate prices and negative equity. Looking towards 2014, the UK can finally see some light at the end of the tunnel. After 6 years, the UK economy is finally recovering, the need for homes with the rising population as well as potential buyers are able to receive credit availability which is able to back up house prices.

 

Research by the Centre of Economics and Business Research, an organization that supplies independent economic forecasting and analysis found that in 2014; a typical house is expected to cost around £227,000. With this in mind, a number of property experts have expected that we will witness a 2.3% increase in house prices in 2014 compared to house prices observed in 2007 at the start of the economic downturn.

 

Looking further afield by 2018, a typical house in the UK will cost around £267,000 which will equal to 4.6% rise for that year. In comparing this significant difference to the former 2013 year, it will be an astonishing 20.4% increase. We all remember the marginal growth UK witnessed with the GDP of 0.3% at the start of the year in 2013. Despite it being only a small fraction, it gave UK an optimistic start to the year, a much needed one in fact. Not only did it start to give the UK population a glimmer of hope and faith, the growth meant that it would indeed lead to an income boost providing more affordable housing.

 

With UK having something to look forward to with the rise in the next five years, prices are forecasted to slow down with concerns about rising interest rates when the scheme ends in 2016. The government’s Help to Buy scheme enables many potential homeowners to finally have their wish come true of owning their own home and getting on that property ladder. Through the Help to Buy scheme, financial help is given including, providing Help to Buy equity loans, shared ownership, NewBuy and Help to Buy mortgage guarantees.

 

Builders too will benefit hugely as the scheme is largely based around new builds. Plans with approximately 5,000 new homes in 2015, the increased supply of new homes will balance the long term trends of UK property market.


 
Upward trends for the housing market
 

With the aid of the ‘Help to Buy’ scheme for those that wish to climb the property ladder, the UK property market will indeed bring in considerable growth for the next year. With ever popular Central areas such as Kensington and Chelsea- an all time favourite with overseas investors hoping to have their share on the capital. Increased competition for the best properties will sure be a fire way to boost the UK property market with better confidence.


 
Increased transactions
 

Going into 2014 with a promising start from what 2013 has shown, UK will witness a rise of transactions. Research by Hamptons International stated that the UK could enjoy double digit growth in the next three years, increased transactions of above £1 million by 2016.

 

Report suggests that Central London will remain top of the league with prices to increase under a third over a five year period. However, despite the popular choice of central London investment, growth will be a gradual slow growth with just an increase of 3% in 2014. Dear prices of such wanted properties have pushed certain potential investors away to safer options which can provide them with better assets at more favourable yields. 

 

Ever popular areas that maintain interest include London and South of England where house prices will outperform the average for England and Wales. Further research by Hamptons International also revealed that the trend in investing high priced properties will be dominated by lower priced properties in less demanding areas in order to offer investors a stable return in these unsteady economic conditions.


 
Central London 2014
 

Interest into properties in Central London as ever on the increase, since 2009 this sector has outperformed the overall UK property market. As a consequence, as the rest of the country catches up with Central London, it will begin to slow down. Properties in prime central London is renowned for its significant prices, with increases in stamp duty on properties of high value, 2013 brought strong returns as well as a 60% since post crash low in March 2009.

 

Prime property across London and the spanning commuter areas will rise by 25%, the south will witness a 21% increase and in Wales and Scotland, a rise of 18%.

 

With new developments that is set to influence the London property market such as Crossrail, the prices in Central London and nearby will surpass the market in Central London of years 2014 and 2015 as we reach towards 2016, there will be a real price growth.

 
 

However, 

 

Yet with rising house prices, there are consequences homeowners should be aware of. For instance, external factors such as the Eurozone crisis are depending on the banks which could lead to a major dent and hindering potential growth. At the same time, there are plans to make more government cuts within the public sector with masses of job losses and higher taxes.

 

There is evidence of more increased house prices, research by the Royal Institution of Chartered Surveyors (RICS) suggests that prices of residential property were at the highest level they have ever witnessed more than over three years in the three months to the end of May. For those of you that are wishing to buy a property, a mortgage is a crucial step in advancing you towards your destined property ladder. 



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