There has been a great deal of speculation in recent weeks regarding the 2013 predicted surge in house prices. However not all pundits are anticipating further increases. The Chief Executive of the National Association of Estate Agents, Mark Hayward has urged a degree of caution indicating that 2013 rather than seeing an upward spiral in house prices, will more likely be a period where the market will adapt to the turbulence of 2012.
It is clear that the main challenges ahead for the UK housing market, centre around increasing the overall supply of housing, particularly in London and the South East. Much more also needs to be done to stimulate the lower end of the chain, encouraging first time buyers to enter onto the property ladder. Historically these new entrants, have allowed those above to move up the property chain. Without first time buyers, a bottleneck is created and this has led some speculators to argue that the lack of new homes being placed on to the market is a result of people not being able to move, rather than not wishing to move,
As London mortgage brokers, we are clear that whilst first time buyers continue to have limited access to the products from lenders and with little at higher loan to values, there will remain little confidence for them to enter the market.
The impact of this is felt throughout the chain and significantly may account for the national increase in rents across the UK. It is no wonder that ARLA, the Association of Residential Letting Agents has predicted that the private rental market will see continued strong demand throughout 2013. The lack of affordable mortgages coupled with borrowing caution from first time buyers is placing upward pressure on rents.
There is a growing fear that renting is becoming a default option for many people who simply are unable to afford to buy or who remain too cautious to take out a first time buyer mortgage.
Ian Potter, managing director of ARLA has indicated that increased rental demand will at least put quality and standards under a greater scrutiny as consumers further call for much higher standards.