UK House Sales Set to Climb Highest Since 2007 Market Crash

on Dec 14, 2012

**Home Sales to Increase 3% in 2013, But Some Challenges to Remain**

In its housing market forecast for 2013, The Royal Institute of Chartered Surveyors (RICS) predicted that there is likely to be a significant growth in UK home sales next year, amid signs of market recovery and increased mortgage availability, The Telegraph reported on 14 December 2012.
According to the influential poll of surveyors, the UK housing market will see a 3 per cent year-on-year increase in home sales, with 960,000 transactions forecast to take place in 2013, compared to an estimated 930,000 home sales this year. This would be the highest number of homes bought in the country since the market crashed in 2007. Yet the improvement will still be modest by historic standards, as total sales in 2006 amounted to 1.62 million. The surveyors also remarked that the pick-up in sales activity is forecast to be particularly noticeable in London, the South East, Wales and the North West.

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RICS chief economist Simon Rubinsohn said: “The amount of sales going through should see an increase across the country, climbing to its best level since 2007, as the Funding for Lending scheme helps boost the availability of mortgage finance.” Yet he also outlined that some problems will remain and that first-time buyers will still struggle to make the jump onto the property ladder. “Even with the Funding for Lending scheme and come other government policies beginning to be felt in the mortgage market, many first-time buyers will continue to find it difficult to secure a sufficiently large loan to take an initial step on the housing market,” Mr Rubinson said.

**2012’s Repossession Trend to Continue**
!m[RICS Forecast of 2013 Housing Market Sees Rents Rising Faster Than House Prices ](/uploads/story/1033/thumbs/pic1_inline.png)RICS also cautioned that the recent trend in repossessions is likely to continue next year, with estimates by the UK Council of Mortgage Lenders stating that up to a quarter of loans taken out at the height of the market in 2007 are now in negative equity. Nonetheless, the body thought with the number of possession claims and mortgages currently more than three months in arrears falling, the number of repossessions in 2013 should dip below 35,000 for the first time in six years.

House Prices to Climb 2%, But Rents Set to Double
RICS’s 2013 forecast sees rent increases outpacing those of house prices over the course of next year. The London-based group said in its report today that following a 1 per cent rise this year, house values would increase by 2 per cent in 2013, while rents would mark a 4 per cent advance.
According to the poll, the divide between house price trends in the regions would be less sharp than in previous years. The market in London and the rest of the south has proved far more resilient than that of the other regions, some of which have experienced sharp falls in prices. RICS said: “Our suspicion is that variation in regional growth performance will narrow a little further over the coming year with the south of the country likely to be increasingly hard hit by the broad direction of fiscal policy.” But London and the southeast, and possibly the northwest, were the only areas likely to see prices rise, the surveyors added.


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