House sales across the UK look set to increase as chartered surveyors’ expectations for the coming three months rose significantly, says the latest RICS housing market survey.
However, opinions are sharply divided as to the effects of the Funding for Lending scheme. The RICS said it was hopeful that the scheme will boost mortgage lending and house buying, but think tank Capital Economics said that because the scheme has reduced rates for savers, it will deter first-time buyers from getting on the housing ladder.
One agent, David Brown, of LSL, said savings rates were ‘miserable’. Sylvia Waycot of Moneyfacts, said: “2013 is starting out as a dreadful year for savers with little hope of change. Providers are not even pretending to offer competitive rates.
“Since August last year, when the Government launched its Funding for Lending Scheme, the savings market has become unrecognisable. Products have been withdrawn, and those that remain have had their rates cut.
“All ages are affected by this, including those trying to save deposits for their first homes.”
The RICS says that house prices remained stable in December and that the market in some parts of the country has bottomed out and “may now be over the very worst”. Notably, prices in the West Midlands stabilised last month, says the RICS: this represents the first time in over two and a half years that prices have stopped falling.
Peter Bolton King, RICS global residential director, said: “As we start the new year, confidence to the housing market does appear to be improving, helped in part by the impact of the Funding for Lending scheme.
“Indeed, our members are predicting that transaction levels will continue increasing in many parts of the country and it may be that we are now over the very worst.
“That said, more still needs to be done to ensure potential buyers can access the market at every level. Alongside this, there is still a clear need for more homes to be built.”
Separately, the Office for National Statistics has come out with its latest report, covering the November housing market.
It says that in the 12 months to last November, UK house prices rose by 2.1%.
It claims that average ‘mix-adjusted’ house prices in November 2012 stood at £241,000 in England, £157,000 in Wales, £128,000 in Northern Ireland and £178,000 in Scotland.
Excluding London and the South-East, the average UK mix-adjusted house price was £186,000.
The ONS’s figures are again at odds with the Land Registry, which has quoted an average selling price of £161,490 across England and Wales, an annual rise of 0.9%.
According to the ONS, the average price of a new home in the UK during November was £213,000 and for a pre-owned house was £233,000.
Meanwhile, Capital Economics has reiterated its forecast of a 5% drop in house prices this year, followed by a further 3% drop next year.
According to the think tank’s UK Housing Market Analysis for the first quarter of 2013, first-time buyers will remain locked out of the market, with house prices still too high in comparison to earnings.
It also says that although the Funding for Lending scheme is helping to bring down lending rates, it is driving down savings rates. As a result, two thirds of prospective first-time buyers believe it will be at least 2020 before they are able to get on the housing ladder.
David Brown, commercial director of LSL Property Services, said: “The concern remains that first-time buyers are bearing a greater burden than those who already own homes.
“With high inflation eating into first-time buyers’ ability to save, and pretty miserable savings rates on offer at the present, we will continue to see strong demand for the private rented sector.”
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Comments
The funding to lending scheme is decimating all of those trying to save a deposit. Before it came you could get 3.5% easy access now you will be lucky to get 2.4%
Its going to take far longer for those trying to save for a house.
I had always thought that of all bodies and organisations involved in the lettings industry RICS had a veneer of integrity, common sense and reliability.
Obviously I was wrong - mind they do talk about sales so when you start from a low base statistically I suppose they could be right.
But nonsense really
Statistically one day, an RICS prediction WILL come true.
Ok, it hasn't happened yet, so fingers crossed with this one.
Then then their muppet members go out and down value them.
And what do the RICS know about home sales anyway? In most towns and cities you can count the number of properties their members sell on Captain Hook's bad hand.