Besley Hill predicts House Prices will RISE

Besley Hill, Bristol and Gloucestershire's largest group of independent estate agents, is predicting an upturn in the local housing market during 2010.

The group’s managing director, Adam Offer, believes that house prices will rise steadily over the year, possibly by as much as 10%. Besley Hill’s 16 offices experienced price rises of a little under this figure in most areas of Bristol and South Gloucestershire last year compared with the same period in 2008.

Adam is confident that this trend will continue due to a number of factors. These include:

• shortage of property coming to the market
• lack of new homes
• stable employment in the area
• many people having greater disposable income than a year ago
• improving mortgage lending (strongly evident since June 2009)
• low base rates (likely to be in place for much of 2010).

“All these factors will lead to demand for homes outstripping supply which inevitably will lead to price increases," says Adam. In the medium-to-long-term, Adam anticipates an increase in demand for all homes built up to the mid/late 1990s. “These homes are better laid out and have more space surrounding them and better parking,” he explains. “Homes built in the later 1990s up to date suffer from poor external layout, parking issues, tiny gardens and poor-size accommodation. “This will restrict demand and prices consumers are willing to pay for these homes.”

Adam lists a number of measures that he believes would help to kick-start the housing market. These are:

HIPs: “Scrap them or give them teeth to make them actually mean something.”

FIRST-TIME BUYERS: “The Government should introduce tax relief for FTBs (similar to the old MIRAS abolished in the late 1980s) and lenders could offer 50-year mortgage terms for FTBs,”

MORTGAGES: “The Government need to put pressure on public-owned lenders to lend at a high loan-to-value (LTV).”

STAMP DUTY: “Abolish Stamp Duty or at least increase the threshold to a more meaningful level.”

“Irrespective of whether these incentives occur, after seeing a rise of nearly 20% in transaction level within the Besley Hill group in 2009, compared to 2008, I expect this rise to be mirrored this year as further confidence returns to the UK housing market,” adds Adam Offer.