New UK home building up according to latest figures
The latest figures from the National House Building Council state that over 34,000 new homes were registered during the last quarter of 2013; an increase of 30% compared to the 26,000 plus registrations seen in the same period the previous year.
Just this past November 2013, 11,409 homes were registered broken down into 8,000 + in the private sector and 3,000 + in the public sector, returning an increase of 20% on last November’s overall total of 9,533.
2014 set to be a strong year for house price growth in the south east
Average UK house prices increased by 4.4% over the course of 2013 and market growth is set to continue into 2014 with the strongest gains unsurprisingly set to be seen in the south east, according to latest analysis.
With demand from aspiring home buyers increasing and a continued lack of supply of houses on the market, this growth is set to continue well into the year as a whole.
Property website Home.co.uk predicts that London and the Home Counties will continue to outpace the rest of the UK’s housing growth this year. Using key data and trends from their ‘Home Asking Price Index’, analysts compiled a set of regional price forecasts, predicting the potential winners and losers in the twelve months.
They predict that marketing times will drop further as demand increases around the country and supply will continue to decrease, especially in London and the South East.
The North West, Yorkshire, Wales, Scotland and the North East’s price rises will still remain below the national rate of inflation with the ever-popular buy to let sector experiencing continued grow despite falling returns.
However, with the support of George Osborne’s Help to Buy scheme for home purchases below £600,000, house price growth has picked up pace to the point where some commentators have expressed genuine concerns of yet another property bubble being created.
Will the current growth last or will it eventually fall flat?
On the surface of things, it is not at all surprising that house sales are up on 2012 to mid-2013 levels as stamp duty exemption for first time buyers ended which encouraged new entrants onto the housing ladder. Other Government schemes such as Home Buy, Right to Buy and Funding for Lending are starting to have a big impact on the economy which is helping to gradually increase demand and of course, house prices.
With interest rates remaining at historically near zero levels, affordability will remain sound for existing mortgage holders and first-time buyers who can get finance however, some have concerns that when the inevitable rate rises do come along, trouble could be ahead.
What can’t be predicted is when the Bank of England governor Mark Carney finally decides to raise interest rates to help economic stimulus but what can be predicted is it has to happen eventually. With a 2015 generals election just over a year away, it is safe to predict a continuation of low interest rates for the foreseeable future to avoid rocking the boat.
The economy and politics go hand-in-hand so a solid prediction could be that 2014 is the year to take advantage of renewed confidence and get back into the markets whilst the going is good. 2015 will most likely be another positive year however, if rates do have any hint of being hiked, certain higher risk loan holders could suffer. Will that effect land or house prices? That all depends on the scale of the damage.
Market confidence is all about supply and demand!
House-building is starting to recover after the huge drop off in development post 2007. Although there’s plenty of positive signs of growth, the on-going lack of finance for large-scale development and inactivity caused by planning red tape continues to act as a drag on the building of new UK homes.
Whilst the level has begun to rise somewhat, it will still take quite some time for output to increase significantly and experts anticipate the level of completed housing developments will remain subdued over the next two years. In short, there are good opportunities for land development this year but making the right choices based on location, desirability and price are key factors moving forward.
We feel that 2014 is a year of opportunities but ones that must be chosen wisely. Confidence is starting to improve but we are still years away from the heady days of the late 90’s and early 2000’s.