House prices and lending will be on the priority watch list for those keeping tabs on the housing market this year.  First time buyers and other topics will likely be close to the top as well.  However, it is with great expectation that homeowners will be watching how house prices fair in the hopes that there will be some recovery or sign of it for their lost equity levels.  While expectations are not that 2013 will bring relief there is the belief that the year will end much as it starts with steady house prices throughout the next 12 months.

Gráinne Gilmore, Head of UK Residential Research, stated, “Some five years after the start of the financial crisis, the housing sector in the UK still does not bear the hallmarks of a fully functioning market.

“Transaction levels have roughly halved since the last market peak in 2007, and are 35% below the 20 year average, as first-time buyers and those further up the housing ladder struggle with tighter mortgage lending rules.

“House prices have been flat or modestly declining across the UK since 2010. This stasis is underpinned by unusual economic conditions, rather than a genuine equilibrium in the market.

“The fundamentals suggest that a further correction in prices is needed as the relationship between average earnings and average house prices is well above the long-term average. We believe that the new ‘average’ at which this ratio settles in the future may be above the historical average, but there is still a further readjustment required to reach that level.”

Some experts have suggested that the UK could be into the next decade before house prices near the levels seen pre-crisis of 2007.