New Year Property Market Forecasts
At the end of any year, there are any number of people popping their heads up with forecasts of what the year ahead might bring and perhaps the most numerous are those who are looking at money and what changes might mean for everyone in the country. With the housing market having gone through some bad times in the last years and many people worrying about whether they will ever be able to afford their own place, it is easy to understand why these forecasters are read avidly by almost everyone. So, what have property market forecasts predicted?
Mortgage rates, as everyone knows, are at a record low and depending on what kind of deal you have, you are likely to be paying very little in interest. Some people in this pleasant position have opted to continue paying their usual payment and therefore reducing their capital loan. Others took the opportunity to reduce their payments to the lender and they are the ones who may be worrying that the rate might rise, because their payments will too. The smart money is on no rate increase – although unemployment is falling, the Bank of England doesn’t have to increase its rate when it reaches 7% and it is believed that there will be no increase in 2014.
House prices are almost universally believed to be set to rise in 2014 and some analysts are even suggesting that there may be another all-time-high in the housing price index. Overheating is something that everyone is anxious to avoid, but with an increase in demand and a 9% price rise seen in parts of London in 2014, record prices are very much on the horizon.
Buy to Let
This is likely to remain a strong sector, according to the financial gurus. The house price rise makes investing in property good financial sense and with demand still outstripping supply in many areas of the country, rents are rising, helping to create rental yields of as much as 10%, although the national average remains rather less at 8.9% over the year. The changes in Capital Gains relief which were introduced in the last budget hit landlords to a slight extent and despite the likelihood that this will be adjusted again in 2014; owning Buy to Let properties will still be a very good return on money invested.