Growth in the private sector housing predicted between 2013 and 2015

There’s good news on the horizon for home owners and right across the construction industry. A recent report on the future of the construction industry predicts a modest 1 or 2% climb in values for the next 12 months or so, but expects to see a healthy upturn right across the housing market between 2013 and 2015.

Key factors for this prediction are:

•  Low interest rates mean that average mortgage repayments art at an eight year low.
• The NewBuy guarantee scheme introduced by the government means that access to mortgate finance should be a little easier.
• Static (or falling) house prices -has improved affordability right across the UK. For first time buyers this means that the average house price to earnings ratio has moved from 4:5 in 2003 to 4:4 in 2011.

NewBuy Guarantee scheme

The Newbuy Guarantee is a scheme backed by both house builders and the government which encourages lenders to increase the availability of mortgages to purchasers with relatively small deposits of 5%. The new scheme, heralded as a way to get First Time Buyers back into the market, offers 95% loan to value mortgages that will be available to people spending up to £500,000 on a new-build property. It is envisaged that up to 100,000 buyers in the UK will benefit from the underwritten loans, with the Government’s liability capped at a hefty £1billion.

All of this means that confidence is creeping back into the market, the Government is committed to helping first time buyers – and it’s all beginning to work.  Britain is building again.

Over time, the new homes industry will create more jobs; raise more revenue for the treasury through stamp duty and the like, increasing the country’s housing supply and alleviating the risk of another housing bubble.

In short, all this is good for the economy – and what is good for the economy is good for all of us.