The New Year is nearly here and it ll soon be time to make New Year resolutions or at least about think what you might be doing in 2010. Are you thinking of moving house?
If you are thinking of moving, then you might want to know what house prices are expected to do next year. At the end of this year house prices and sales have seen an upward trend which was not predicted at the beginning of this year. With this in mind it s worth taking any prediction with a pinch of salt as the predictions will change over the year.
What makes house prices go up?
1. Low interest rates which we ve got
2. High employment rates which we don t have. Unemployment is expected to continue rising before it falls
3. Low demand compared to supply at the moment this is the case but come Spring, more supply is expected as would be sellers come out of the woodwork
4. Easy credit which we don t have but it s at least stable
5. Low deposit requirements which we don t have but again, more mortgages requiring smaller mortgages are becoming available
6. Stable Politics with a general election looming this year and a possible change of government we don t have this
7. General optimism the public believe the worst of the recession is over though we re hardly optimistic
The main factor supporting house prices are the historically low interest rates and the imbalance between supply and demand. However, more would be sellers are likely to come out of hiding in Spring next year and so supply will increase and is likely to match the demand.
Mortgage availability is at least stable now but the mortgage market is soon to change. More rules and regulations are due to be introduced, particularly regarding self certification (so mainly affecting the self employed) and this will in turn effect the number of people who are approved for a mortgage.
With a looming election some would be sellers could be deterred from entering the market: by this time next year a new government could be established and if the Conservatives gain control they are likely to abolish HIPs, which could further deter people from entering the market whilst the legislation to do so is pushed through. Many people like to stay put whilst changes are made around them.
With the recession still upon us, unemployment is still on the rise. As the recession eases and growth gradually resumes more people will be back in employment in the private sector. However, in the public sector unemployment is expected to rise whilst the government makes savings and reduces the country s huge deficit.
So 2010 is unlikely to see continued house price increases. It s more likely that house prices will flatten out or fall (but not significantly). If you are thinking of moving house then be realistic about what price you expect to get. Going on the market at too high a price could result in it being harder to sell and then if you to drop the price you might end up getting less for it than if you d set a lower price at the beginning.
We ll be keeping a close eye on what happens. Happy 2010 to you.
Author Resource:
Debbie Morgan writes for the UK Property Search Engine, http://www.wheresmyproperty.com and http://www.renovatealerts.com , the site that finds property to renovate.
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