17:32 16 January 2013
Are you thinking of buying your first home this year? Or perhaps you are already a homeowner looking to move up the property ladder? Either way, there's some good news for starters.
According to the Bank of England, mortgage funding to consumers is set to improve this year as the government's Funding for Lending Scheme (FLS) which launched in August 2012, continues to roll out.
The Bank's latest survey found that mortgage lending picked up in the last three months of the year and will continue to do so during 2013.
But how much will you need to borrow to pay for your home in the first place? With the cost of the average property declining by 1% during 2012, according to the latest figures from Nationwide Building Society, having risen by 1% in 2011, I asked a handful of experts for their house price forecasts for the next 12 months.
Here is what they said...
Content editor at MoneySupermarket, Clare Francis
"When it comes to house prices, national figures often mask the real picture. In 2012, the market was quite strong in London and parts of the south east, but in many other areas of the country there has been near paralysis with many properties having been sat on the market for months without shifting.
"I think we'll continue with a similar picture in 2013 although the Funding for Lending Scheme will hopefully result in more mortgages being available.
"An increase in the number of more competitive mortgage deals for those with small deposits will enable more first time buyers to get onto the property ladder, which should help break the impasse that is affecting the market in so many parts of the country and get things moving again.
"That said, it is unlikely that house prices will change much this year - I'd expect them to remain broadly flat."
David Hollingworth, at mortgage broker London & Country
"There has been some encouraging improvement in the mortgage market as competition has become more intense against a backdrop of cheaper funding costs for lenders. Mortgage rates have therefore been improving and there are some extremely attractive deals on the market.
"However, the focus has been on those with a big deposit and, although I expect that situation to gradually improve, any increase in mortgage lending and availability is still from a low base.
"In this case, our expectation for house prices for 2013 is that they are likely to remain broadly flat. And, while some may rise a little, there could well be others that fall back as regional market differences persist."
Mark Harris, chief executive of mortgage broker SPF Private Clients
"We expect to see a small rise in the value of property during 2013 but much depends on the part of the country you live in, as the north/south divide is also likely to deepen.
"There will be no movement in base rate (currently 0.5%) this year, although mortgage rates will fall further as more lenders take advantage of the Funding for Lending scheme.
"Hopefully, this will also mean more choice and better rates for those with smaller deposits - as the housing market definitely needs more first-time buyers to give it a kickstart."
Martin Ellis, housing economist at Halifax
"Conditions in the housing market are likely to remain much the same as they are against this economic background. Accordingly, we expect to see continuing broad stability in house prices nationally during 2013. Prices are again likely to end the year at levels close to where they began it with the market continuing to lack any genuine direction."
Adrian Anderson, director of mortgage broker Anderson Harris
"Here at Anderson Harris, we expect house prices to remain flat across the country with modest levels of growth in pockets of London and the south east - and base rate will be held at 0.5% for at least another year.
"While mortgage rates will stay low, we don't think this necessarily means more deals will be approved. Lenders are likely to keep their criteria tight, meaning first-time buyers in particular will continue to struggle.
"In 2013, the Bank of Mum and Dad, and even the Bank of Grandma and Grandpa, will be called upon more than ever."
Henry Pryor, independent housing expert
"The factors that could affect the housing market in 2013 are; new building and planning rules, lending requirements - including the interest-only mortgages time bomb - low transaction volumes, government interference, the Funding for Lending Scheme and overseas buyers. Get the impact of any one of the above wrong and your forecasts is as good as useless.
"Bearing all these factors in mind then, my own view is that house prices will rise by an average 2% across the country, while rents will climb by an average 3.5%.
"That said, remember that the value of all asset classes are calculated by the price that a very few 'lots' are sold for. This is just the same with property and currently only one-in-three homes actually sells. In other words, let's ignore asking prices as they are just a 'greed gauge'.
Robert Gardner, chief economist at Nationwide Building Society
"Given that the UK economy was in recession for much of 2012 a 1% decline in house prices could be seen as a relatively resilient performance. However, the fact that prices fell even though employment rose strongly, suggests that conditions remain fragile.
"The outlook for 2013 therefore remains uncertain. Continued low interest rates and policy measures such as the Funding for Lending Scheme should provide some support. But, with the economic recovery expected to remain fairly weak, the housing market is likely to be characterised by low levels of activity again in 2013, with prices remaining flat or modestly lower over the course of the year."
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