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'Uncertain housing market' forecast

Next year will see an "uncertain and fragmented" housing market in the UK, Rightmove predicted, after 2011 ended with a 2.7% drop in average asking prices.

The property website said that while UK asking prices should rise by 2% in 2012, house hunters will find areas with a lack of choice and high prices or a glut and bargains all within a few miles of each other.

The average national asking price was up 1.5% on the same period last year, but only the North and the South West registered an increase on the average house price since last month, with the price in Greater London down 2.2% and the price in the South East down by 6.2%. The West and East Midlands were also down significantly on last month by 3.8% and 3.4% respectively.

The forecast for 2012 states that there will be an expected 1.2 million new sellers, which is down by around a third on 2007 pre-credit crunch levels.

This shortage of new sellers will underpin prices and prevent a price collapse, but Rightmove believes there will be an increased number of forced sales due to the tough economy. In the long-term, it is predicted that the UK will continue to endure a housing shortage as building numbers fail to keep pace with the number of new households.

There are also fears over what will happen should the eurozone crisis spark soaring levels of unemployment, as Rightmove says this may provoke higher levels of immigration to the UK from Europe, as people are likely to come in search of work and will pile on added pressure to the country's housing stock.

With lenders continuing to rebuild their balance sheets, they will be choosing potential borrowers carefully, resulting in many first-time buyers losing out as they struggle to raise deposits.

A recent survey found that of those who intend to buy over the next 12 months just 23% will be purchasing for the first time, which is significantly below the commonly accepted 40% level required for a healthy and active property market.

Speaking about the impact and influence the eurozone crisis could have on the property market, Rightmove director, Miles Shipside, said: "It's like a high-speed train running along a damaged track, but could the bumps be so severe as to cause another Lehman Brothers-style derailment of the property market?

"Some potential home-movers are watching in anticipation for the answer before making a decision on a large financial commitment. In the event of a disorderly collapse of the eurozone then our predictions for 2012 will also be derailed."


From Belfast Telegraph