After a sustained period of house price stagnation in many areas; 2013 was the year when the property market came back to life.
According to leading lender Halifax, prices rose by 7.7% across the country as a whole with the increase in London exceeding 10%.
So what does the market have in store for home-owners and landlords in 2014?
The general consensus is that 2014 will bring more of the same. “It will be another good year for property prices,” says Doug Shepherd of home.co.uk. “Increased confidence will no doubt produce extraordinary price rises. Regional disparities that exist will continue to play out and may well be exaggerated further by the government’s blanket implementation of Help to Buy.”
With an increasingly limited property stocks and increased demand driving prices, it may well prove to be a popular year for making a move. Leading property portal Rightmove has seen a 21% year on year increase in traffic levels and, with mortgage rates remaining low, there are no signs that demand from buyers will reduce.
Rental prices are rising more slowly than purchase prices – especially in the most popular and sought-after areas. In prime central London, for example, average yields remain below 3% as landlords are forced to price their properties competitively to attract the best tenants who are increasingly clued-up and unwilling to stretch their budgets.
There is expected to be a halo effect from the red hot London property market with established regional favourites being the first to feel the benefit. “I am predicting a strong bounce-back in the provinces,” says Andrew Turner of rural land agent and surveyor Smiths Gore. “It will start with traditional hot spots such as the Cotswolds and North Yorkshire. The average value of a country house now looks incredibly reasonable against a prime London apartment. By the end of 2014 the country house market should be fully back on track.”
Investment hot spots
In the capital, there are several regeneration projects which look particularly tempting for investors looking to take advantage of the low interest rates to increase their portfolio.
“Of particular note is the proposed extension of the Northern Line which will include new stations at Wandsworth Road and Battersea Power station,” explains Jonathan Mount of The Buying Solution. “This will dramatically reduce journey times to the City. With the new American Embassy, high end residential schemes, restaurants, schools and parks, it is no wonder that investors have their eyes keenly focused on this area.”
In the South, Croydon is in the spotlight where a plan for a £1 billion project, led by a new Westfield shopping centre has created a lot of interest. The developers hope to receive outline planning permission in 2014 and can then begin planning the project in earnest. Forward-thinking investors hoping to get the jump on the inevitable price rises once the development is confirmed are already evident.
Stratford was tipped by many in 2012 as the next London property hot spot post-Olympics. Whilst price rises have been somewhat sluggish, there are still thousands of new homes in the pipeline with the athletes’ village alone being converted into 2,800 dwellings. Great transport links and the close proximity to Canary Wharf mean that Stratford remains on the smart investor’s radar.
So the message is, whatever your property plans for 2014 you can guarantee that the next twelve months will be anything but dull!