The annual housing price index figures from Halifax have arrived this week, and the results suggest a positive outlook for those looking to sell a property over the coming year. Property prices dropped by 0.6 per cent during December 2013, but that trend was not unexpected as market activity tends to reduce around the holiday period. For the whole of 2013 the market saw an average house price increase of 7.5 per cent for the period, leading many to believe that prices will continue to climb over 2014.

The housing economist for Halifax, Martin Ellis, said that: ‘The recent strengthening in house prices is increasing the amount of equity that many home owners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply.

The bank confirmed that after poling customers for their views on selling, 51 per cent of participants felt that it was now a good time to consider selling, compared with 39 per cent that felt it was not. The report stated that this is the first time in 3 years since the report began that participants have returned a positive outlook towards selling their properties. On that note, the bank have estimated that property values will continue to increase anywhere between 4-8 per cent during 2014.

It has been assumed by many market commentators, economists and the Government that the catalyst for a raise in property values can be linked with a lack of properties available to purchase, coupled with a raise in interest from would-be buyers. In addition, the Help to Buy scheme has been championed by the Government as being intrinsic in the recovery of the market, although in several quarters the ongoing validity and effectiveness of this particular scheme are continue to be questioned.

Simon Butler of Contractor Mortgages Made Easy said: ‘As it stands, the access to a mortgage via the Help to Buy scheme is still limited as many banks have not chosen to offer loans via the scheme. While some lenders have taken steps to offering loans, it is debatable how much help to buy is being offered by these seemingly proactive banks, as rates tend to sit at the higher end of the scale, around the upper 4-5 per cent banding. In addition, credit scoring for these cases has been vastly tighter than at lower loan to values, resulting in many cases being turned down due to more restrictive conditions.

Butler continued: ‘Hope is there that this could be a growth area for the market into 2014, especially with the withdrawal of the Funding for Lending scheme for mortgage lending. It should be noted that the impending Mortgage Market Review rules are to be released by the Financial Conduct Authority in April 2014, so lenders are likely to implement some intensive updates to their underwriting processes as the year continues. It is likely that this alone could slow the underwriting process down, so taking forward any plans to move or refinance before that point would be a sensible step.’

Article By: Jon Sheilds, Media Executive at Contractor Mortgages Made Easy

Media Contact: Raman Kaur, Public Relations Manager

Tel: 01489 555 080

Email: media@contractormortgagesuk.com