Factors affecting the supply and price of housing stock seem at to be the focus of much attention at a time when many experts are making predictions about what is likely to happen to the property market in 2010.
In a recent article that appeared on lovemney.com a team of experts were invited to put forward their views on how they see house prices panning out over the next 12 months
Interestingly, only one of the invited experts, Mr Peter Bolton King, of the National Association of Estate Agents, chose the opportunity to make mention of the home information pack. Commenting on factors influencing house prices he could not resist the temptation to knock the HIP by saying:
‘…..recent price rises have been driven by demand outstripping supply in some parts of the market. Supply will remain stable in the run up to the general election. However, if more properties come onto the market - which may happen particularly if Home Information Packs are scrapped - prices are forecast to flatten, and in some cases, fall’.
Bolton King purportedly speaking on behalf of the estate agency community is a known opponent of the HIP despite the fact that many of his members are still out there raising large sums of revenue on the back of HIP sales, and using the HIP to tie un-expecting consumers into expensive retainers.
It would be refreshing to hear the NAEA coming forward with their own proposal for reform rather than attacking without foundation every move made that has any mention of making the home buying and selling process quicker and more transparent.
Fortunately not all agents follow the NAEA line of thinking.
It is also reassuring that the real experts in this field were far more tuned in and picked up on the true economic factors that they consider are, and will continue in 2010 to affect supply and pricing.
Here is a sample of the comments:
‘Ernst & Young ITEM Club, an economic forecasting company, predicts a dip in the first half of 2010. Hetal Mehta, Senior Economic Advisor at ITEM says the recent surge in house prices is a 'false dawn', supported by cash buyers and the shortage in property. Again, prices are expected to fall due to a dearth in available mortgage funds and tight lending criteria.’
‘The Halifax predicts prices will be flat in 2010.The mortgage lender isn't convinced the upward trend in 2009 will be repeated in 2010. Although lower rate mortgages and recent improvements in the labour market have fuelled prices in the short-term, the lender is unable to see a sustained recovery this year unless the economy strengthens, and the supply of properties for sale increases significantly.
‘Royal Institution of Chartered Surveyors (RICS) predicts prices will rise between 1% and 2% in 2010. Simon Rubinsohn, Chief Economist at RICS forecasts the shortage in supply will continue with stocks on surveyor's books remaining at historical lows. This could fuel further house price gains in the early part of the year. The imbalance between supply and demand is expected to narrow, resulting in a rise in the number of property transactions as stock gradually increases. Transactions are forecast to step up from a monthly average of 55,000 or 60,000 to 70,000.On the downside, first time buyers will face continued difficulty in finding mortgage finance unless assisted by parents. While cautious lending, a flat labour market and uncertainty in the economy will result in low house price growth.’
Lovemoney.com also courted the views of the consumer. Their survey showed that the consumer expected prices to increase by 3 %. They gave the reason for this as follows:
‘Confidence is rising among bullish consumers following a stabilisation of house prices during the latter part of 2009. However, rising unemployment is expected to temper stronger growth in 2010, while the ability of borrowers to raise a sufficient deposit is also seen as significant barrier’.
In conclusion there is little certainty amongst the views expressed on expected price increases/decreases, though the reasons for the stock shortage and prices fluctuation are far clearer. The fear of unemployment and lack of high LTV mortgages are clearly the only influential factors. The HIP factor pales into insignificance when compared to these major economic factors.
In a recent article that appeared on lovemney.com a team of experts were invited to put forward their views on how they see house prices panning out over the next 12 months
Interestingly, only one of the invited experts, Mr Peter Bolton King, of the National Association of Estate Agents, chose the opportunity to make mention of the home information pack. Commenting on factors influencing house prices he could not resist the temptation to knock the HIP by saying:
‘…..recent price rises have been driven by demand outstripping supply in some parts of the market. Supply will remain stable in the run up to the general election. However, if more properties come onto the market - which may happen particularly if Home Information Packs are scrapped - prices are forecast to flatten, and in some cases, fall’.
Bolton King purportedly speaking on behalf of the estate agency community is a known opponent of the HIP despite the fact that many of his members are still out there raising large sums of revenue on the back of HIP sales, and using the HIP to tie un-expecting consumers into expensive retainers.
It would be refreshing to hear the NAEA coming forward with their own proposal for reform rather than attacking without foundation every move made that has any mention of making the home buying and selling process quicker and more transparent.
Fortunately not all agents follow the NAEA line of thinking.
It is also reassuring that the real experts in this field were far more tuned in and picked up on the true economic factors that they consider are, and will continue in 2010 to affect supply and pricing.
Here is a sample of the comments:
‘Ernst & Young ITEM Club, an economic forecasting company, predicts a dip in the first half of 2010. Hetal Mehta, Senior Economic Advisor at ITEM says the recent surge in house prices is a 'false dawn', supported by cash buyers and the shortage in property. Again, prices are expected to fall due to a dearth in available mortgage funds and tight lending criteria.’
‘The Halifax predicts prices will be flat in 2010.The mortgage lender isn't convinced the upward trend in 2009 will be repeated in 2010. Although lower rate mortgages and recent improvements in the labour market have fuelled prices in the short-term, the lender is unable to see a sustained recovery this year unless the economy strengthens, and the supply of properties for sale increases significantly.
‘Royal Institution of Chartered Surveyors (RICS) predicts prices will rise between 1% and 2% in 2010. Simon Rubinsohn, Chief Economist at RICS forecasts the shortage in supply will continue with stocks on surveyor's books remaining at historical lows. This could fuel further house price gains in the early part of the year. The imbalance between supply and demand is expected to narrow, resulting in a rise in the number of property transactions as stock gradually increases. Transactions are forecast to step up from a monthly average of 55,000 or 60,000 to 70,000.On the downside, first time buyers will face continued difficulty in finding mortgage finance unless assisted by parents. While cautious lending, a flat labour market and uncertainty in the economy will result in low house price growth.’
Lovemoney.com also courted the views of the consumer. Their survey showed that the consumer expected prices to increase by 3 %. They gave the reason for this as follows:
‘Confidence is rising among bullish consumers following a stabilisation of house prices during the latter part of 2009. However, rising unemployment is expected to temper stronger growth in 2010, while the ability of borrowers to raise a sufficient deposit is also seen as significant barrier’.
In conclusion there is little certainty amongst the views expressed on expected price increases/decreases, though the reasons for the stock shortage and prices fluctuation are far clearer. The fear of unemployment and lack of high LTV mortgages are clearly the only influential factors. The HIP factor pales into insignificance when compared to these major economic factors.
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