Future Property Price Predictions 2012 to 2013

publication date: Sep 19, 2012
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Future 2012 Property Price Market Predictions

Property Prices 2012 - 2013

Based on all the market data assessed, we continue to believe the market will soften in most areas towards the end of the year. Less people are likely to try and sell their homes with continued news from the media and property prices reports of the market getting worse. Coupled with this, buyers will stay where they are, almost forcing desperate sellers to drop their prices or sell via auction so they can move on with their lives.

Looking further ahead, 2013 will be a critical year for the property market. We will be six years into the credit crunch and have a good idea whether our double dip recession is going to deepen or we can force some recovery into the UK economy.

One of the critical things will be people’s confidence and motivation to move. 2013 could be the year where sellers accept they have to lower prices to attract buyers. If sellers don’t become more realistic about prices, buyers may though just decide to stay put in rental accommodation, particularly as less reports in the Rental Market will be talking of rental increases.

By the end of the first quarter of 2013 we will also see if the new government schemes introduced during 2012 will have any impact on the market. However unless buyers are feeling confident about stepping onto the property ladder and are keen to take on the responsibility of owning a property during a depressed market, activity and therefore prices could fall further.

Summary of market forecasts:-

Nationwide – Overall  their data “suggests a continuation of the pattern experienced over the past two years, with prices remaining fairly stable over the next twelve months.”

RICS - “The longer term 12 month outlook deteriorated, with price expectations falling further into negative territory and sales expectations broadly flat after rising the previous month.”

PWCVia a Telegraph news report warn of a “17-year, inflation-adjusted slump” and predict “the economy will flat-line this year before growing just 1.7pc in 2013” This will affect house prices according to PWC who claim Average house prices will have bounced back to their 2007 high in cash terms by 2017, but will need another seven years to catch up with inflation. By 2020, headline prices will be up 30pc but still 7pc below their real terms peak”

Savills predict they “can see a return of inflation-adjusted house price growth from 2016, earlier in London and the South East, as economic growth acts as a trigger to improve buyer sentiment. Our forecasts are therefore for average prices to rise by a nominal 6.0% over the next five years, falling by 11% in real terms.

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