A stagnant year for prices ahead, but 2013 will be better
YORKSHIRE house prices may fall slightly or remain stagnant during 2012, although growth is expected in 2013, according to a new residential market forecast report from property consultants Jones Lang Lasalle.
Residential director at the Leeds office of Jones Lang Lasalle, Guy Ackernley, says: “Our forecasts suggest that the eurozone crisis and continuing austerity measures will continue to dent UK economic confidence during the first half of 2012, leading to a stagnant housing market with perhaps some slight falls in some areas.
“However, we expect these problems to fade during the second half of the year and that prices will regain ground to finish 2012 at roughly the same point as now (January 2012).
“The fundamental issue is the low level of house building which remains far below what the country needs. With homes in such short supply, and interest rates likely to remain low, it is hard to envisage prices falling steeply.
“The Leeds city centre sales market picked up during 2011 with agreed sales by Jones Lang Lasalle on the second-hand market up 25 per cent on 2010 and enquiries up ten per cent.
“The quality of enquires has greatly improved with the majority of applicants who register with us being serious purchasers.
“In terms of new residential developments in the city centre, there is little choice on the market. The only two new schemes in Leeds city centre, Granary Wharf and Saxton, are experiencing good levels of demand, most of which is coming from first-time buyers. Granary Wharf achieved more than 50 sales in 2011 with more than 90 per cent being to owneroccupiers. This is a clear indicator that city living is still popular for the right product in the right location.”
Guy Ackernley added that shared-equity products have also proved very popular as a practical way for first-time buyers to get a foot on the property ladder.
There has also been an increase in buy-to-let investors looking for their first investment or adding to their portfolio at a time of generally low bank interest rates for cash investors.
“The letting market continues to boom with high occupancy rates and lack of available properties to let,” says Guy.
The Jones Lang Lasalle UK report says that, although northern regions will have a more difficult year than the south with average prices dropping by two per cent, there will be “bright spots” such as York which will be relatively unaffected.
It also reveals that fundamental shifts are occurring in the housing market which may be more important than price changes.
Regulatory changes, combined with on-going funding issues, suggest that mortgage volumes will remain depressed compared with before the financial crisis, effectively denying homeownership to most of a generation.
Residential research director at Jones Lang Lasalle, Jon Neale, says: “The eurozone crisis, and a stricter global regulatory environment, suggests that the mortgage market will not rapidly return to conditions seen for much of the 20 years before the financial crisis.
“First-time buyers will continue to struggle unless they have access to a significant deposit.”
GUY ACKERNLEY: Prices will regain ground by end of year.