The positive sentiment among buyers in the UK property market is set to remain in place this year, according to one firm, but for completely different reasons than those experienced last year. In 2013, most of the positivity stemmed from the fact that interest rates were low, making it far easier to access a mortgage than it has been at any time since the onset of the financial downturn. However, the picture for 2014 is expected to be entirely different, despite the fact strength in the market will be sustained.
Savills reports that increased buyer numbers throughout the coming 12 months will come as a result of improving economic conditions across the nation. More people are now able to get a job, driving up income, and with the economy set to improve by 2.5 per cent in the coming year, it will mean generally a higher level of confidence being inherent across the UK, a sentiment that will be passed into the housing market.
It also said that growth this year, especially in terms of people who are investing as opposed to buying property as an end user, will be driven through the capital in particular. "We expect debt markets to loosen slightly, though finance for speculative development and tertiary investments will remain virtually nonexistent outside London. Risk averse international investors will continue to be heavily biased towards the capital city, but some will be tempted to the regions by higher yields and less competition. The more risk embracing investors will be looking to capitalise on the historically wide spread between London and regional yields, as well as the even wider spread between prime and secondary," said the report from Savills.
However, it will not be all about the London market this year, with recovery still expected to be spreading wider throughout the year. In both residential and commercial markets, the regional sectors will start to increase, with economic positivity in the outlying 'key cities' likely to see prices and rents increase - ideal for those looking for a strong return on investment.
- Monday 03 February 2014