Surveyors and mortgage brokers are predicting a more stable year for the UK housing market than 2002, with prices due to rise by a modest 7%.
Nationwide's house price survey revealed prices nationally rose by 25.3% during the year to the end of 2002. Although this magnitude of increase is unlikely to be repeated during 2003, experts are still predicting that house values this year will increase by several times the rate of inflation.
Latest reports from The Halifax predict a rise of 9% nationally, while The Nationwide is anticipating an increase of 10%. While this means that homeowners won't be able to view their homes as the guaranteed money-spinners as they did last year, it will bring welcome stability back into the market.
From the broker perspective, pundits expect business as usual for the mortgage market in 2003, as lenders clamour to introduce market-leading fixed and discounted rate products. Andy Frankish, director of Rotherham-based mortgage broker Mortgage Talk believes 2003 could be the year when fixed rate mortgages start to overtake discounted loans as the product of choice.
He says: “With global circumstances likely to have a more significant bearing on our domestic economy than during 2002, fixed rate products offer the certainty of pegging to a known rate for up to 10 years.
“All in all, this year will see a period of consolidation and stability return to the housing market, which has to be good news for a sector that saw first-time buyers priced out of the market in many regions. Luckily, we in Yorkshire and Humberside are well positioned to build on the trends that 2002 brought, and to profit from what 2003 has in store for us.”
Robert Bryant Pearson, Bristol-based chief executive of Allied Surveyors, says: “From our own experience we know that many overheated hotspots have already plateaued and there is the likelihood of some downward adjustment occurring in some locations.
“In what will be another benign year for the property market, house prices will increase by about 7% overall but some segments will see a slight decrease.”