The housing market looks much different than it did this time last year and the months ahead are not expected to resemble any of their counter months from 2014 either. The UK housing market is undergoing a needed natural correction to the surging house prices that occurred last year. While property values are not expected to reflect the gains of last year, homeowners hoping for their equity to grow will be rewarded, only more slowly than before.

Currently there is lower demand from buyers. There are many reasons behind the lack of demand with some of the blame being on tighter lending practices due to the Mortgage Market Review that was instated early of 2014. It takes longer to gain an approval due to the need for lenders to insure a borrower can afford a loan even when interest rates increase. Along with the stress test, a borrower must also undergo intense scrutiny as to their savings and spending habits.

Besides tighter control on lending, there are those buyers that are still staying away from the market and the higher property prices. Many believe sellers will have to become more aggressive to find a buyer by being competitive with their asking prices.

According to Rightmove, the number of homes registered for sale was 10% lower in December 2014 than in December 2013. The number of registered homes available for sale fell to the lowest level in five years. In January 2014 the average registered homes per sale per agent was at 63, in the middle of the year that climbed to 72 and then dived to only 57 in December.

The lack of supply on the market pushed asking prices up 1.4% from November to December.  Mortgage lending fell 7% in the last quarter of 2014 according to the Council of Mortgage Lenders.

Forecasts for the housing market are for a slow and steady rise.

Rightmove’s asking price index revealed that the number of days a house sat on the market was at 79 days in December 2014. This was up by more than a week with the summer average in 2014 recorded at 63 days.

For those looking to take on a mortgage or remortgage deal, lenders are experiencing low demand as well, which is making them competitive and bringing out very low interest rates.