Opinion

Residential Market Growth Predicted for Q1

Residential market growth has been predicted for the first quarter of the year, driven by new funding schemes. According to the latest Royal Institute of Chartered Surveyors' (RICS) housing market survey, confidence is returning to sector and will bring with it an increase in house sales. In December, 24 per cent more surveyors predicted transactions to rise in 2013, following a steady performance in the final month of the year.

Peter Bolton King, RICS global residential director, stated: "As we start the new year, confidence to the housing market does appear to be improving, helped in part by the impact of the Funding for Leading Scheme. Indeed, our members are predicting that transaction levels will continue increasing in many parts of the country and it may be that we are now over the very worst."

Under the Funding for Lending Scheme, banks and building societies are able to borrow from the Bank of England for up to four years against assets, such as business or mortgage loans. This is designed to act as an incentive to banks to boost lending through lower interest rates and increased availability of loans and mortgages: The more they lend, the more they can borrow.

However, according to Mr Bolton King, more still needs to be done to make the property market more accessible to potential buyers. Construction of new properties also needs to increase, especially in areas such as London, where supply is unable to meet demand. This will help to stimulate activity and enable the market to build on its current performance.

With December 2012 the first time that national price balance was in positive territory since 2010 - with price forecasts by RICS to rise by two per cent during 2013 - the sector doesn't need an excuse to grab the bit between their teeth. Signs are pointing towards growth and decisive action may be the key to gaining momentum and reversing the negative market trend established during the financial crisis.

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