Prices and transactions to rise next year, Rightmove forecasts

Prices and transactions to rise next year, Rightmove forecasts

Rightmove is forecasting both price growth and a rise in transactions next year.

This morning it said that asking prices in 2014 are likely to rise 6% to 8% – unless more properties come to market.

Its predictions come after the smallest December fall in asking prices for properties new to the market since 2006.

It said that while transactions in 2013 are up 13% on last year, new listings were up just 2% on 2012.

Rightmove director Miles Shipside called for sellers to “spring into action” in 2014.

He said: “After six years afflicted by the credit crunch, there’s a definite window to move up or move on in 2014 before the market’s usual pre-election pause in early 2015.

“A good and plentiful choice of property for sale would limit sellers from getting over-ambitious with their asking prices and result in a national average increase closer to 6%.”

Rightmove is also expecting price movements to be highly localised, continuing this year’s pattern.

It expects cities like Leeds, Manchester and York to push up regional prices in the north, even though properties in the suburbs may not see similar rises. Further south, it predicts that London house prices could rise by another 6% and the south-east by up to 10%.
Shipside said: “The strength of the market recovery will remain patchy, with average incomes, employment and regeneration levels having a major say both north and south.

“Overall, agents in even the more depressed parts of the UK say they can see light at the end of the tunnel, though they also observe that there is a lot of stale stock in these slower-moving areas to be cleared before prices can rise.”
He went on: “Consumer confidence is essential to a healthy market. Transactions only increase if people are motivated to make the financial commitment to buy and trade up. More will do so if they believe prices are on the way up rather than down, leading us to expect transaction volumes to hit the one million milestone in 2014.”

Shipside made it clear that Rightmove views Help to Buy quite differently from other commentators, including Mortgage Advice Bureau (see the MAB story below).

He added: “Agents report low take-up of phase two of Help to Buy in London and the south-east, as mortgage repayments for many properties are not affordable for buyers with only a 5% deposit.

“Take-up appears to be greater the further north you go, so it seems to be helping those it was targeted at, and those expecting a Help to Buy London bubble have got it very wrong.”