HOUSE prices are set to remain flat in 2013, Halifax bank said yesterday, as weak economic growth and pressure on household finances continues to constrain demand.
It also announced that the price of an average UK home rose by one per cent month-on-month to £160,879 in November.
“We expect continuing broad stability in house prices nationally in 2013,” said Halifax housing economist Martin Ellis. “Prices are again likely to end the year at levels close to where they begin with the market continuing to lack any genuine direction.”
Looking ahead he said that price increases will only occur when there is a full-blown economic recovery and in the meantime young people will continue to struggle: “Conditions will remain tough for first-time buyers with no radical change in their circumstances expected. As a result, the numbers of first-time buyers are likely to remain low by historical standards.”
Some price rises are expected in 2013. Increased demand for rented property is set to boost the buy-to-let market, while values in London and the south east will continue to outperform the rest of the country.
Economist Howard Archer of IHS Global Insight agreed that “any significant, sustainable turnaround in house prices” is still some way off.
But he said the Bank of England’s Funding for Lending scheme is having a real effect on mortgage availability: “A number of lenders have also recently cut some of their fixed mortgage rates, although mortgage conditions remain challenging for many people who are unable to raise large deposits.”