House prices in the UK will rise 2% next year and rents will go up 4%.
The predictions are from the RICS, which is also forecasting a rise in the number of transactions.
It estimates that there will have been 930,000 transactions this year, and that there will be 960,000 next year.
The RICS says it has arrived at its figures using Council of Mortgage Lenders’ data. The CML itself is forecasting 825,000 housing transactions in the UK for this year.
According to the Land Registry, there were 653,487 sales in England and Wales in 2011, so if the RICS figures are correct, there will have been a large rise in transactions this year – and also a boom in transactions this autumn and winter. Latest Land Registry data shows that housing transactions between January and August inclusive this year totalled just 423,735.
The RICS is also predicting that the number of repossessions should dip below 35,000 for the first time since 2007.
Simon Rubinsohn, RICS chief economist, said: “The average house price in the UK looks set to rise by a further 2% next year, despite the uncertain outlook for the economy.
“More positively, the amount of sales going through should also see an increase across the country, climbing to its best level since 2007, as the Funding for Lending scheme helps boost the availability of mortgage finance.
“But these tentative signs of recovery in the sales market should not blind us to the very real problems that still exist. Even with the Funding for Lending scheme and some other government policies beginning to be felt in the mortgage market, many first-time buyers will continue to find it difficult to secure a sufficiently large loan to take an initial step on to the housing market.
“Meanwhile, the alternative of renting is becoming more and more costly, with a further increase in rents likely in 2013. Critically, the Government needs to ensure that the conditions are in place that will enable the stock of new housing, whether for purchase or rent, to rise more rapidly.”
Comments
Anonymous Coward: Trust me, I could not be more relaxed...
On the other hand, I am sorry but you have had a pretty awful day of badly thought-out comments, mon ami!
How can you reasonably claim that taking the average number of transactions from a period of only TWO years - third and fourth highest yearly transaction periods in the last quarter century (source: HMRC) - "...should take account of seasonal and annual variability."?
One swallow does not a Summer make. Two years isolated from the rest of the housing market tells you Jack Sh!t unless you want to make other periods look artificially good - or bad, as you have managed to do.
I don't get what you are trying to do, with your initial post AC. From where I stand, it reads like an attempt to poison the market from within.
Your second post added further confusion when trying to justify the first.
Initially, you stated
"Which is a shade below 56% of "normal".
When you factor in repossessions and sales forced before repossession, this figure would be considerably lower."
Then in your next post, you state "Repo rates in 2006 and 2007 were lower than they are now and I also qualified my statement with mention of pre-repo sales."
Yeah. LOWER in 06/07 means HIGHER in 08-12... which would INCREASE the percentage, not lower it as you suggest. Adding an unknown and unqualifiable quantity to your argument - 'pre-repo sales' as you call them - just fudges the issue.
Sorry, AC - but I can't for the life of me figure why you think I should be nodding in agreement with what you have said. It is, simply put, a mess of errors.
Sorry and all that - love and kisses right back at ya... but somehow I feel that I've blown my chance of the last smooch of the night... :o(
PeeBee
Please relax a shade.
Firstly I stated the stats were not rigorous!
Secondly - the "normal" figure was calculated by adding up the transactions for every single month from Jan 1996 to Dec 2007 and taking the average - that should take account of seasonal and annual variability.
Thirdly - the post crunch average was calculated the same way, for exactly the same reasons.
It is the best that any moderately numeric estate agent could do at short notice (I think).
If you actually read through the land registry statistics for 2006 and 2007 there were only about 10% more transactions than the median across the dates mentioned which means that although prices were wild and the number of people making offers was huge, the total number of sales completed was not that much higher, not really.
Repo rates in 2006 and 2007 were lower than they are now and I also qualified my statement with mention of pre-repo sales.
I think, on balance, that my post was valid and that my stats are pretty sound (in general...).
The practical question I would like to ask back to you, is "What is your point?" you have challenged me by attacking my wording ("normal") but not actually SAID anything.
From your previous posts on this site, I would expect you to agree with most of what I said, not react violently to one word in my post.
Love & kisses
XXX
Peebee - no he classes the average monthly completions based the time period between Jan 1996 and Dec 2007 as normal. Well unless its a typo and I can't be bothered to check right now
But you are right I think avearge transaction levels will remain at the new normal of 50K month between 2008 - 2012. Unless something big happens.
Anonymous Coward:
"Average England & Wales completions per month between Jan 1996 and Dec 2007 was 95,422.
Average E&W completions / month Jan 2008 to Oct 2012 is 53,038
Which is a shade below 56% of "normal"."
So... let me get this straight - you class the market of 2006/7 as "normal"?
"When you factor in repossessions and sales forced before repossession, this figure would be considerably lower."
Again... let me get this straight - you believe that the 2012 Land Registry figures INCLUDES repossessions?
You also believe that there were clearly NO repossessions in 2006/7?
Come on, AC - you obviously needed to change your specs; your mindset - or both - before posting today, methinks...
As the population gets poorer I doubt there is scope for either rent or house price rises. Wages are frozen, inflation is high.
Really? That would be nice, but then 2% of sweet FA is still sweet FA...
I have just done a quick Land Registry Analysis - not statistically resilient - but good enough for EAT (better than some of the stats quoted on the site anyway).
Average England & Wales completions per month between Jan 1996 and Dec 2007 was 95,422.
Average E&W completions / month Jan 2008 to Oct 2012 is 53,038
Which is a shade below 56% of "normal".
When you factor in repossessions and sales forced before repossession, this figure would be considerably lower.
Indeed in my area (Surrey) the figures show that transactions are barely 40% of normal.
Land Reg Figures show a price rise of 0.2% over the year so far with early rises offset by drops of 0.6% and 0.3% over September and October.
When you factor in November & December the year will be a loss for certain.
With both supply & demand at rock bottom, London Prices dropping now too and no let up in the poor economic outlook overall, I have a feeling this is perhaps a wish, rather than a probability.
(Oh, I forgot to mention the effects of inflation - ouch!)