House prices to rise in 2013

The beleaguered housing market is set to bounce back next year across England and Wales, according to research. A report by property search website Rightmove predicts an average rise of 2 per cent in sellers’ asking prices in 2013, thanks to increased competition among mortgage lenders and a continued shortage of homes.

This is despite this month seeing the biggest fall in asking prices for more than a decade, with the average dropping 3.3 per cent – £7,772 – to £228,989 in December.

Rightmove said big falls are expected over Christmas, when those who are selling often have a pressing reason to move. Prices are still 1.4 per cent higher than a year ago.

The predicted growth in the new year will not be limited to the London market, as has been the case in the past.

Asking prices will still grow in the capital by around 3 per cent over 2013, having risen by 7 per cent since a year ago.

But some analysts have said that a 7 per cent stamp duty rate put on homes worth over £2 million in the spring will help to put a brake on London prices.

Meanwhile, the ‘ripple effect’ of higher prices in London will mean stronger growth in surrounding areas as buyers cast their nets outside the capital, Rightmove said.

The South East in particular was said to have ‘underperformed’ in recent years.

In the South East, South West and East Anglia, asking prices will grow by 3 per cent.