As we move into the final quarter of 2014, our thoughts as Coventry estate agents become slightly wistful, looking back at what's happened during 2014.
Coventry estate agents will also be turning their minds to the next calendar year: with 2015 promising to be an exciting 12 months for anyone thinking of moving home. In this blog, Carl Allsopp and his team of property consultants summarise 2014 and look to the year ahead.
Coventry house prices:
2014: House prices in 2014 rose modestly, largely in part due to the natural correction following the economic crash of 2007/2008. Property search portal Zoopla says house prices in Coventry have risen 8.53% in the last 12 months - or £13,417 of monetary value added to the average Coventry property.
2015: While Coventry estate agents expect house prices in the city and the suburbs to keep rising, the increments will be controlled, relative and sustainable. Allsopp & Allsopp reiterates that each area, suburb, neighbourhood, postcode, and even street has its own property microclimate, which can affect prices. The state-of-repair and size of each individual dwelling will also affect a property's value, as do wider economic and political conditions.
Photo Credit: Snowmanradio
2014: Mark Carney completed his first full year as Governor of the Bank of England and Coventry estate agents listened to his rhetoric concerning interest rates and the property market. For all his talk, interest rates didn't budge from their historical low of 0.5%, meaning that property for sale in Coventry remained at an affordable level.
2015: Coventry estate agents will be reading the voting notes of the rate-setting committee to monitor the number of members who vote for an interest rate rise. If the number of pro-rise votes starts to increase, the market should prepare itself for a small increase during 2015.
The mortgage market:
2014: This year saw a mortgage market review, which was designed to evaluate what went wrong during 2007/2008 and put measures in place to stop a property market crash happening again. Extended mortgage application interviews that probe a borrower's finances more deeply are now in place, as are 'stress test', which ask borrowers to illustrate how they would afford mortgage repayments if interest rates rose, or if their circumstances took a turn for the worst.
On the plus side, swap rates - the rate at which lenders buy money - have been very low. Swap rates can have a bigger influence on mortgage rates than interest rates, and 2014 has seen some of the best mortgage affordability for many years due to low swap rates.
2015: The Bank of England has applied for more powers with which to control the property market via mortgage lending. It already counsels lenders on the issue of high loan to value rates and income multiples but it is looking for its advice to become direct - which would mean lenders have to abide by the Bank of England's directive.
Help to Buy:
2014: The Help to Buy equity loan scheme that assists in the purchase of newly built homes were extended until 2020 in England, after the initial end date of 2016. The Help to Buy mortgage guarantee initiative - designed to help almost all buyers with low deposits - was cited as a factor behind the booming housing market this year. However, the Bank of England declared the scheme presented no risk to financial stability, and the initiative will continue to run as planned until 2nd January 2017.
2015: Both elements of Help to Buy will continue during 2015 unless the Government - on its own or in conjunction with the Bank of England - decide to withdraw the schemes. Campaigning ahead of May's general election may reveal more details about the Government's long-term thoughts on Help to Buy.
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