House price rises predicted next year

News at Wright & Wright | 03/01/2014

House prices are forecast to continue to increase in 2014.

New figures published by Halifax have highlighted the potential for further home price increases across all areas of the UK in the coming year.

According to the financial organisation, average house prices will continue to increase at around the same rate as they have done this year - between four and eight per cent - in 2014, while the Bank of England's base rate for lending is believed unlikely to rise from its present historic low of 0.5 per cent throughout the year.

Furthermore, Halifax revealed there is currently very little evidence of a housing bubble forming in the UK, which is excellent news for both homeowners and prospective buyers over the coming months.

Halifax housing economist Martin Ellis commented: "Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence. This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand."

Measures like the government's Funding for Lending scheme and Help to Buy have also helped boost the market, although the overall impact of these schemes may have been somewhat exaggerated by some analysts.

Mr Ellis also noted that several factors could place a limit on valuation rises over the coming months, including ongoing pressures on household finances for many Brits, as earnings continue to fail to keep up with price inflation for many.

In addition, the growing value of homes over recent months means many current property owners will have gained additional equity in their property, which in turn could lead to more people placing their home on the market in the months ahead.

This would have the effect of helping to meet the growing demand for purchases, in turn providing a dampening effect for further house price increases.

"Despite the recent gains, house prices remain 12 per cent below their August 2007 peak and transactions in 2013 are still around a third below the average for 2006 and 2007," Mr Ellis concluded noted.