House prices are predicted to increase next year despite the uncertain economic climate and pressures on mortgage lenders.
The property website Rightmove said today it expected prices to rise by about 2% in 2012, compared with the 1.5% annual increase revealed in its December housing market survey. It said prices would be underpinned by a shortage of new sellers, which it forecast would be about 1.2 million next year, down marginally on 2011 and around a third lower than before the credit crunch. Rightmove's 2% rise compares with a recent prediction from Halifax that the housing market was likely to be stagnant next year, with prices little changed over the 12 months.
Rightmove agreed that any growth in the housing market could be limited by uncertainty over the eurozone crisis and fears over growing unemployment during the coalition's austerity drive. So despite current low interest rates, many potential home-movers may remain reluctant to commit themselves. The difficulties faced by first-time buyers are likely to continue, with a recent survey showing only 23% of those intending to purchase a house were doing so for the first time. This is well below the 40% level regarded as necessary for a healthy housing market.
Dearth of sellers due to fears over eurozone crisis and rising unemployment will push property prices up 2%, says Rightmove
