2011 Property Outlook
- Author Emma Whitney
- Published February 12, 2011
- Word count 449
2011 Property Outlook
As we approach the end of the year 2010, we can look back and see that it has proved to be very mixed year in property sales. Stamp duty changes affected the market – initially helping sales with the £175,000 threshold, although the reversion to £125,000 has seen some house prices decline towards the end of the year. There has been an overall increase in the number of properties up for sale between August and October, leading to pressure and competition in pricing.
Eventful Year
2010 has seen many events which lead to uncertainty in the property market – from the General Election in May, to the emergency Budget in July and then a Government Spending Review in October. This has led to many feeling unsure of their long term financial situation, and bred reluctance to make greater financial commitments.
Other changes which the new Government brought in have also affected the housing market. The Home Information Packs (HIPS), introduced by the previous government were scrapped by the Coalition. These packs gave potential buyers additional information about the property, but were undertaken at the expense of the prospective seller. By abolishing these, the Government removed a barrier to sale, which led to the increase in properties for sale during the following months.
Buyers Market
An increase in supply led to a drop in prices as it became a buyers market. However with high loan to value mortgages expensive, if available, the market is somewhat limited to those with sufficient funds readily available.
That said, for anyone in this position there is a good choice in both new build and pre-existing homes.
Future Homes
Interest rates are likely to remain low, and mortgages are likely to remain affordable in 2011. Studies have shown that the average monthly mortgage payments in 2010 are nearly half of the level of 2007, although the requirement for 20% deposits for first time buyers is still proving problematic.
Generally house prices are looking stable for 2011, with the possibility of a slight further decline. With what looks like a steadier year ahead, many will be adapting to the new financial climate and living more within their means. This may lead to a decline in the sales of expensive, luxury houses but an increase in sales for affordable, good quality homes.
Eco homes
The outlook for 2011 seems at this stage to be broadly ‘more of the same’ though the spring budget may perhaps bring the odd pleasant surprise, particularly on further green incentives which might stimulate this segment of the market. Certainly at this point we do not share long term doom and gloom predictions and consider low interest rates will remain a relevant factor as will the relevance of buying a sustainable new home.
Percy Williams build new homes in Cornwall, and have recently completed development of eco homes Hayle, Cornwall. For more information Visit: www.new-homes-cornwall.com
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