Property predictions: what will happen in 2014?
Ray Boulger, an adviser at mortgage broker John Charcol, says: "Most of the major lenders, and many smaller ones, will be offering 95% loan-to-value (LTV) mortgages by the end of March 2014. The extra competition will result in a modest fall in the interest rates on offer and, equally importantly, more lenders in this sector of the market will help borrowers who might be declined by their first choice lender. However, FTBs who can stretch to a 10% or 15% deposit will find much cheaper rates are available.
“However, buying agent Henry Pryor points out some first-timers "may still struggle with the necessary credit checks as lenders demand pristine histories for the higher LTV products".
He also warns that for many first-timers, prices will continue to "climb out of reach as government schemes help more people to pay more for the finite number of homes that are for sale".
David Hollingworth, spokesperson for mortgage broker London & Country, says it may well get easier for second-steppers, in particular to make the move up the property ladder.
"Home movers who have hunkered down in recent years may now be tempted to market their property with the prospect of more potential buyers enabling them to make the move," he explains.
That said, Pryor says estate agents are looking for serious commitment from sellers: "Those looking to move up the housing ladder will find they must gamble by selling their existing home before estate agents will take their interest in the next house seriously.This is uncomfortable but a trend towards ‘cash' buyers will force those with a house to sell to miss out on the better homes."
However, Kate Faulkner, managing director of propertychecklists.co.uk, is more optimistic. "For those who are trading up or down, 2014 should be a good year. Prices growing at the 6% predicted is good for the market as more people will be attracted to buying or selling, which will help to increase stock levels and therefore choice overall."
Boulger suggests 2014 is a year for landlords to exercise caution. "Rental yields are likely to fall during the year but this is not bad news for existing investors because it will be driven by higher property values without a corresponding increase in rental levels.
However, as property values rise new investors will have to be increasing selective in their choice of property to make sure the sums stack up."
Faulkner agrees: "2014 in many areas will be one of the hardest times to be in buy-to-let property. Prices are predicted to rise by 6% but rents don't look like they are moving much at all."
For those looking to buy a BTL property, she says that with little stock on the market "it will be tough to find the bargains and ‘below market value' deals investors should be looking for". However, she adds, for those that can find a property which stacks up "a rise in prices initially predicted for 2014 will help to give higher returns early on in the investment, which have been lacking over the past six years".
Boulger says the end of the Funding for Lending scheme for residential mortgages is likely to result in a modest increase in rates during the year but that fixed rates will remain excellent value. "Two-year fixes only provide protection from rate rises during a period interest rates are unlikely to increase much, if at all, and therefore for most home buyers a five-year fix looks better value."
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
The catch-all term applied to investors who buy properties with the sole intention of letting them to tenants rather than living in them themselves, with the proceeds from the let usually used for the repayment of the mortgage. Buy-to-let investors have to take out specialised mortgages that carry higher interest rates and require a much bigger deposit than a standard mortgage. Other expenditure can include legal fees, income tax (on the rental profits you make), capital gains tax (if you sell the property) and “void” periods when the property is unlet.