There is a variety of opinion on what 2011 holds for the property market although it certainly looks like it will remain a buyers’ market. At best it is likely that prices will rise very slightly or remain static. Other industry commentators are predicting a sharp decline of up to 10% by the end of the year. As ever, no-one really knows. What we do know is that housing market trends are closely linked to the general economy and that forecasts for the UK economy are for very modest growth (1.3% growth in GDP). Mortgage approvals will also remain subdued, with continued pressure on lenders. Banks and Building Societies will be looking to attract ‘low risk’ borrowers with straightforward financial circumstances and significant deposits.
In terms of the rental market, 2011 looks like being another buoyant year. Many people who would normally be looking to buy their first property are staying put in rental accommodation and saving for their increased deposits. Others are renting to see where the market is going and not committing to purchasing in the current uncertain economic climate. This has resulted in a shortage of supply of rental properties and increases in rental prices in many areas.