The fever the festive season will get over by the first week of January and everyone will be back to the business with a new zeal. Though 2014 ends with an all-time low of the year, future seems to be quite assuring. Experts say that there will be a promising increase of 4 to 5 percent in the coming months. Well, it is not just an optimistic thinking without any rationale. Rather, there are valid reasons to substantiate the fact.
- Stamp duty reforms and drop in the interest rate will keep the morale high. People will be greatly enthusiastic for properties, and a buyer sentiment would prevail.
- As there will be the shortage of prime location properties, interested buyers will not hesitate in paying premium prices for something lucrative.
- It is a market buzz that the pre-election momentum will discourage home owners coming in the market prominently, but those who want to take advantage of the existing rules and regulation will search for good deals.
- As the stamp duty reform will be effective from the coming financial year, sellers may offer falsely priced properties. They will offer in quite tempting values, very low as compared to the proposed price after new reforms.
As the market stumbled in the month of December, people feared that the situation will be gloomy for a long time. However, current trends contradict the belief. More importantly, the recovery is expected to happen countrywide, irrespective of the area and volatility of the market. Last year, the annual rate of increase was 8.5 percent on the positive side, but the last two month closed it to 7 percent on the positive side when the Christmas fever started.
What is the forecast for 2015?
It is a fact that no forecast can predict what will happen to the market with 100 percent accuracy. However, there could be guesses that come out to be very close to the reality. As the average national price looks to increase by 5 percent, South-East region will show the highest price hike. Experts say that The South-West and the Eastern regions will be the successors while north will be the last in the row. It is also expected that London will not steal the show as it did last year. Rather, some sectors will struggle to keep the momentum. There are different reasons for the downfall. Since London properties have already reached up to the maximum affordability limits, stamp duty change, and the overall political scenario will hamper the salability.
As far as London is concerned, shortage of properties may remain a constant irritant next year as well. Though last year showed an increase in the number of resale properties, the completed transaction showed 18 percent hike. It means that popular locations felt some supply shortages. Almost similar situation prevails in the rest of the country also, a few buoyant areas in particular. One thing is very clear that in spite of fewer properties available, dealers have to put maximum efforts in converting sales leads into sales deeds.
Upward price pressure will be there but not very intense. A few home-owners may get restricted due to stringent lending criteria. Similarly, pre-election anxiety will result in delayed purchases. Some home-owners may not turn up to the market at all because of limited purchase choice for those who want to sell. Home-owners restricted their desire to place the properties in front of prospective buyers due to restrained buyer demand.
The situation is still quite encouraging!
Property dealers say that in spite of the reasons like election, hesitation of home-owners to place a property in the market; there is still a great hope. The situation is encouraging and positive for the property market. Today, the average number of properties for sale in estate agencies reaches quite low. However, the New Year will start with a positive note and very soon good quality properties will be in high-demand and short-supply situation.
Recent surveys of prospective home-movers indicate that almost two-third people think that in 2015, property prices will surge to an all-time high. Since Bank Of England doesn’t show any indications of increasing base rates, the scenario will be quite encouraging. Stamp Duty Reform announcement aids to the purchase cost and market sentiments positively. It will get converted into a pulsating market.
Will 2015 bring a gala time for buyers?
Experts are quite confident about it because they feel that the ‘best buy’ situation never arrived last year in spite of the great fall in the month of December. Since there will be a great improvement in the economic scenario, buyers will take the advantage of another price fall that is expected in 2015. The long-awaited reform of stamp duty will make it quite lucrative, and the second half of 2015 seems to be more attractive than the first six months. The prices will be relatively stable in spite of a thin volume.
Some experts feel that people will find it unaffordable to go for the property because price hike will overtake wage inflation. However, early movers will always get the advantage of the situation. Also, buy-to-let investors will be encouraged to enter the market. As the pricing incompetence gets over by the first quarter of 2015 and the new reforms take place, those who own properties just above 125K, 250K, and 500K marks will correct the price up to the correct value. It will add to the house price inflation because purchase price will increase greatly.
Sellers were forced to limit the prices below threshold because of stamp duty constraints earlier so that they remain lucrative for buyers. The new reforms will remove the constraint, and sellers can keep price range at the actual levels. On the other hand, buyers will also not need to pay inflated duties. The proposed structure will moderate it, and it will be a win-win situation. It is quite obvious that the market will take a great momentum, and there will be enthusiastic buyers and interested sellers. The market will buzz with a huge number of transactions.