House Prices should have Marginal Growth in 2012
Recent forecasts have called for house prices to begin rising and recovering over the next few years until there is a 15 per cent increase by 2016. This will have been welcomed news by homeowners that were worried about remortgaging while house prices were falling. It will also be hopeful news to those that are in or close to negative equity. In the near future however the house price growth is expected to be marginal if at all. Assetz has forecasted that 2012 will see only a slight increase to the average UK house price of 2 per cent. Most of the increase will be driven by rising house prices in the Olympic city of London.
Stuart Law, chief executive of Assetz, said “However, it is too soon to see the effect of the eurozone crisis which will continue to impact the markets, limit the amount UK banks are able to lend and, perhaps most importantly, stifle consumer confidence.
“We are also likely to see a continuation of parents opting to help their children onto the property ladder instead of keeping money in the bank, where they are seeing little return on their savings.”
House prices have been falling and erasing built up equity from homeowners. For those that purchased their home in the pre-recession they have seen values fall below their mortgage level leaving them in negative equity. Since equity helps a homeowner obtain better interest rates on their remortgage the fact that there will be upward moving prices next year and the years ahead is good news.