In January 2013 the Nationwide Building Society measuring price changes from December 2011 to December 2012 showed a national fall of 1% leaving the average price of a property at just over £162,000.
Moving to the end of the year this picture has changed dramatically with the latest data disclosing the average price at £174,500 and national increase of between 5 ( Nationwide) and 7.7 %(Halifax). This has been fuelled by increased transactions and a dramatic increase in mortgage lending. The Land Registry has a more modest estimate of value growth if 3.1%.
Whichever of these statistics you rely on it is clear that that there has been a significant increase in prices within the last 12 months.
The Nationwide reported in November a 34% increase in mortgage lending.
As for total transaction numbers, the Council of Mortgage Lenders estimate this will exceed one million, which compares favourably with the 1.6million figure for the boom years 2006 and 2007.
The rental market has also faired extremely well this year with the monthly lettings index from Countrywide disclosing average national rents up 4.2pc over the year to November. The increase in property value has however had a negative impact on the rental income relative to property price yield, with the yield, according to the specialist buy to let lender Paragon, falling from 6.7% to 6% on the year ( November 2013 to November 2014)
House prices are predicted to continue to rise with the Government predicting a 27% price increase by 2018.
It is also predicted by one leading buy to let broker that buy to let transactions are likely to increase in 2014 by at least 25%.
All good news but what are the possible barriers to these predictions becoming reality?
Interest rates remain at a record low but what is likely to happen if these suddenly increase. Looking at the varying views on this most commentators believe we will not be seeing an increase until the early part of 2015.
Another fear relates to the global economy and how this still remains in a very unstable state. Central banks remain unclear about how and when to remove the colossal stimulus they have provided for their economies over the past five years and of how this will impact on growth. On top of this is the fact that many of the problems which led to the near collapse of the banking system has still to be addressed. All of this has led some commentators to predict that we may be on course in 2014 for yet another economic crisis.
in conclusion with everything else being equal 2014 should be a good year for those working in the property industry though given the unexpected collapse in 2007 who am I to say this can be guaranteed! Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at firstname.lastname@example.org