Sustainable recovery for UK property market predicted for 2014 by NAEAEstate agents expect the UK residential property market to be buoyant in 2014 with a sustainable recovery in prices and sales and no bubble.
A better balance between supply and demand and a more fluid market where moving is affordable and there is less friction in the moving process is what is needed, according to the National Association of Estate Agents (NAEA).
‘We end this year with market conditions very much improved, thanks to a reviving UK economy and various successful government schemes like Help to Buy and Funding for Lending, and this buoyancy looks set to continue well into 2014. But fears of a housing market bubble are misplaced,’ said Mark Hayward, NAEA managing director.
He pointed out that transactions, which are regarded as a better index than prices, are well down on pre-crisis levels as are levels of home ownership and recent price increases are small in comparison to the rapid rises seen pre-financial crash.
‘Inevitably, prices in London and the South East may heat up, but in the rest of Britain the property market revival is likely to be much more tepid,’ he explained.
He also said that owning a home is still out of reach for many people as wages struggle to keep pace with prices. ‘Much more needs to be done to make moving more manageable. In particular, reviewing the outdated Stamp Duty system and reducing the upfront costs for first time buyers who still only make up less than a quarter of all buyers and are likely to remain in the minority in 2014,’ said Hayward.
Agents predict that the supply of homes could tighten in 2014, especially larger, family homes which tend to be neglected by new build developments. ‘We are seeing more and more serious house hunters return to the market so properties are being snapped up quickly. According to our market data, supply is still well down on recent years,’ explained Hayward.
‘In 2013, some 50 properties were available on average per member branch versus more like 60 last year and back in 2008 we were typically seeing figures in the high 90s. We need supply to keep pace with demand in 2014 or prices could escalate unchecked,’ he said.
‘The prospect of sooner than expected interest rate rises should act as a natural brake, but we need this new optimism in the market to be matched by new homes in order to get proper, sustainable growth next year,’ he added.