By Chris Sapey of Sapey & Co in Norwich
With Christmas drawing ever closer – now only 4 weeks away it is still business as usual at Sapey & Co. Confidence in the housing market is continuing to build. According to the latest monthly survey by the RICS vendors are returning to the market in larger numbers but are still being outweighed by the number of potential buyers. This has resulted in the number of agents reporting price increases rising by 14 % between September and October. This is despite continuing strict lending criteria on mortgages and the requirement for larger deposits.
So what does this mean for the Norwich market and its suburbs? Locally we are still seeing prices strengthening and a buoyant market despite Christmas looming. We predict that next year despite the probability of more properties coming to the market the number of potential buyers will also increase particularly as availability of mortgages eases. We therefore expect house prices to increase at least at the rate of inflation if not slightly above. This may not be the case for the housing market nationally where some major agents are predicting a fall in the mainstream market of between 3 to 6.6 per cent.
Longer term we predict the growth prospects for house prices locally will continue to look good. Although the East of England Regional Assembly are promoting plans to deliver up to 5650 new homes per annum between 2011 and 2031 the prospects of this happening looks slim without major investment in transport infrastructure such as the construction of the Northern Distributor Road, the Long Stratton bypass and major rail improvements from Norwich to both London and Cambridge. Bearing in mind Norfolk is still awaiting the construction of the final dual stages of the A11 to London plus the need the party winning next year’s elections to implement major reductions in public expenditure over the next few years the availability of public funds to finance transportation improvements is likely to be limited. The result will be that new build targets will not be met creating a shortage of supply in the housing stock and upward pressure on prices. This news is therefore good for existing home owners but not so good for those wanting to get on the housing ladder. Prospective first time buyers may therefore be better to enter the market sooner rather than later. The same also applies to those people seeking upgrade to a larger property.
Chris is on 01603 616666.