UK Property 2013 – House Prices, Lending, Supply, Rents…
There is always much speculation about how the UK property market will fair when we start a new year. How will the market correlate to the economy as a whole, and the biggest question of all is whether its recovering from the credit crunch?
- House Prices
UK House Prices in 2013
House prices are low currently and the advise from PropVestment is that property prices will not stay low forever. Simple demand and supply, population is growing faster than new supply, together with smaller family units means shortage. Further lending is still tight but there is major pressure to improve. If you can afford to buy now, do it.
Today Rightmove are claiming that sellers are pricing 0.2% higher in 2013
UK Property Lending in 2013
Lending to first time home buyers in the UK increased 11% in 2012 compared to 2011, however this is still considerably lower than pre credit crunch. There is constant pressure on lenders to lend more but the criteria remains tight. Hopefully 2013 will mean more realistic and universal schemes rolled out by lenders, with more scope than last years NewBuy and FirstBuy.
With regard to Buy to Let, it is almost impossible to get interest only and most deposits are needed over 25%. Experienced investors should attempt to find alternative finance sources and release equity across other parts of their portfolio to fund the short fall.
At PropVestment we have a range of financing options available for investors looking for short or long term finance, including development and bridging finance.
Experts and government reports have suggested that 232,000 new homes will be needed to keep up with demand, however forecasts predict that only about 100,000 new homes will be built in 2013. This means that there is a shortfall needed to be filled.
PropVestment suggests investors and developers to undertake as many development projects as possible. If you are ahead of the game you will benefit from this over demand. Exit and sale will be easier in the current market.
Further planning laws are tipped to be relaxed to accommodate for the shortage, get in there early with local authorities and smart architects.
Rents are expected to remain high and increase as landlord’s attempt to cash in on high demand. Demand will remain high as much of the population find it difficult to start on the property ladder and are still not mortgage worthy. The influx of migrants from the EU will add to rental pressure especially in London and South East.
Landlord’s beware not to be greedy, get quality tenants in that can be sustainable in rent payments in the long term. There are increased rent arrears and evictions that prove costly to the landlord.
PropVestment: Where to buy in 2013?
London and the South East are always strong but currently heavily priced in. In particular due to the influx of foreign investors, who have a strong preference for the capital and are adverse to other areas.
Hence PropVestment’s advise is to focus your investments where there are major infrastructure and employment improvements planned.
Transport improvements, especially rail links that are commutable to the capital will appreciate and rent well in the coming years. Look around Cross Rail stations heading out from London.
PropVestment’s UK Property Market 2013 Conclusion
- High Prices
- High Rents
- Shortfall of new properties
- Difficult lending but will ease a bit
- Focus to buy near transport improvements
PropVestment provides all types of property sourcing services. We can arrange finance, protection. We have a range of investors that can invest in your projects or purchase your properties.