A stag­nant year for prices ahead, but 2013 will be bet­ter

Yorkshire Post - Property - - PROPERTY - Sharon Dale

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.

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