The biggest challenge in 2013 is for the market to adapt to the reality of the economic situation. The predictions for the UK property market for the coming year have just been revealed by the Association of Residential Letting Agents (ARLA) and the National Association of Estate Agents (NAEA).
ARLA: 2013 will not see a slowdown in rent levels.
- When it comes to rent levels, as long as the shortage of housing stock continues, it is unlikely that there will be any relief on rising rents throughout 2013.
- Indeed, in urban areas the demand for single person occupancies may well continue throughout 2013, which will increase the existing pressure on high demand properties and areas.
- The private rented sector will continue to see demand outstrip supply throughout 2013, particularly in London and the South East.
- The lack of affordable mortgage finance coupled with borrowing caution from consumers will result in more families choosing to rent rather than buy in the next twelve months.
- The PRS will likely play an even more crucial role in the housing market in 2013, as renting becomes a default choice for many people who simply cannot afford to own a home, or are too cautious to take out mortgage finance.
- This increased demand will put quality and standards under a greater spotlight, where some quarters of the PRS let the wider market down. 2013 will be time for unscrupulous agents and landlord to put up or shut up.
Ian Potter, Managing Director of ARLA: “Consumers are rightly calling for much higher standards in the PRS and we are seeing demand for licensed ARLA agents grow amongst tenants and landlords alike.”
NAEA: 2013 will see prices stabilise though first time buyers still face the biggest challenge.
- 2013 will see the UK property market adapt to the turbulence of the past year and begin to stabilise.
- The market will continue to recover from historic lows since the recession, but that recovery will be slow and painful for many homeowners, particularly those outside London and the South East.
- In 2013 a big challenge is to improve the level of housing supply in the UK; much more needs to be done by Government to up the levels of new homes being built.
- More needs to be done to support first time buyers, partly by encouraging lenders to offer products to support those seeking to purchase their first home.
- Transactions will likely remain suppressed at this lower end of the market, as many prospective buyers do not yet have the confidence to borrow.
- The North-South divide was laid bare during the Olympics, and although the promised house price boom in East London didn’t fully materialize, the knock-on effect on market confidence in London and the South East cannot be under estimated.
- The North of the UK continues to struggle to keep up with the modest housing recovery in the South, and 2013 will see this gap widen.
NAEA Chief executive Mark Hayward: “I don’t believe we will see a surge in house prices during 2013 as some speculators have suggested.
ARLA: 2013 will not see a slowdown in rent levels.
