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2007 PROPERTY PREDICTIONS
The National Association of Estate Agents (NAEA) is predicting a steadier year for house prices across the UK in 2007, with regional variation being a key characteristic of the market as property supply continues to be an issue in many places. Interest rates will have a vital role to play in ensuring that struggling areas are able to weather the difficulties. Meanwhile, the proposed HIPs legislation presents huge uncertainty for the market.
Average house prices
Following a difficult year in 2005, the majority of 2006 has seen a healthy market with average house prices having risen around 9 per cent since January. This positive trend is expected to continue in 2007, but at a slower pace with the NAEA forecasting rises of around 5% over the year.
Regional differences in supply and demand
While the market has always been subject to regional variations, these are likely to become more pronounced in 2007 as the issue of property supply comes to the fore. The latter part of 2006 has seen the gap between areas struggling to find property and those where supply is not such an issue widen markedly.
Shortages in the South East have led to high prices and a high pace of activity, which is distorting figures on a national level. While the overall picture may look positive, a number of areas across the UK have been experiencing a much flatter market. These regions have not been helped by two interest rate rises over the last four months.
Interest rates
Following the increase of interest rates to 5% in November, leading economists are now divided over the movement of rates in the early part of next year. While the recent rises may help to calm house price inflation in London and the South East, there are a number of already underperforming areas across the rest of the UK that are likely to suffer further if there is another rate rise.
With this in mind, the NAEA is warning the Bank of England not to be governed by the London market when making decisions on interest rates next year.
Consumer confidence
Consumers have demonstrated a renewed confidence in 2006 and the NAEA expects this to continue into 2007.
With many set to take advantage of the higher lending multiples now being offered by banks, some could run into problems if there is a significant rise in interest rates. The NAEA is advising home buyers to plan carefully and be realistic about what they can afford in 2007.
First time buyers
Although NAEA estate agents have reported an increase in the number of first time buyer sales recently, first timers are likely to continue experiencing difficulties next year if issues such as affordability and stamp duty remain unchecked. The NAEA urges the Chancellor to seriously consider these when looking at his budget for the next financial year.
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Householder’s Guide to the Future
A guide for people buying a new home, or planning to extend or redecorate, has been prepared by Bexley Council. It provides essential information on what to consider when choosing construction materials and how to ensure that future running costs and environmental impact are kept to the minimum.
Cllr John Waters, Cabinet Member for Regeneration and Housing, says:
“A typical household could save up to £200 a year through simple energy efficiency measures. If we design our homes to be more sustainable and use more sustainable construction techniques we will make an impact on climate change. There’s a wide range of things we can do.
“Our homes contribute in total 50% of all UK emissions, made up of 30% from the energy used in the home, 10% from the manufacture of construction materials used to build the home and a further 10% from the production of other materials - fabrics, goods and so on - we put into our homes.”
Cllr Gareth Bacon, Environment Cabinet Member, says: “We need to understand the impact that our actions today have on the opportunities for future generations to live healthy, happy and full lives. Public interest and political direction around climate change is hitting the headlines and a proposed Bill has been outlined in the Queen’s Speech. Once again, Bexley is in the vanguard.”
The guide says: “One of the easiest ways to understand and appreciate the concept of sustainability is to consider the legacy that we leave to those who follow us.”
With that in mind, it uses a simple index system to take the reader through buying a home, building an extension, simple redecoration, improving the garden and then how to save money and protect the environment.
The benefits of sustainable design and construction are that it
saves money in the long term
is essential to minimise climate change
reduces pollutants and improves health
minimises waste and limited resources
provides more comfortable healthy homes
The guide also covers renewable energy techniques such as wind turbines and solar panels now becoming available in DIY shops and builders’ merchants. It is available online here.
For further information contact Adrian Cole, Head of Building Services, on 020 8308 7802 or by email: adrian.cole@bexley.gov.uk
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