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UK house prices: 2013 property market forecast

8th January 2013

 Doom-mongers warn that 2013 could be an unlucky year. An asteroid is expected to whizz near the Earth in February, and the Mayan apocalypse prophecy that didn’t come true this year might just be running late. Not forgetting, of course, that ominous number “13”.

Some property experts are certainly pessimistic about the state of the market.

“We expect a one per cent decline before growth returns,” says Grainne Gilmore, head of research at Knight Frank. It seems the property world is still feeling the delayed effects of the recession.

Other experts agree, warning that in some parts of the country, such as Scotland and the North, prices will dip by up to four per cent.

All of which is bad news for anyone trying to sell their house. For shrewd purchasers, however, it offers the chance to snap up a New Year’s bargain. Those in the know needn’t be unlucky in property.

Once we are out of these particular woods, many predict a return to the sorts of increases Britain enjoyed before the financial crisis.

“We believe growth will accelerate beyond 2014, with house prices set to rise 8.8 per cent in 2015,” explains Tom Cann of BNP Paribas bank.

These are promising noises, but how can you exploit this unique market? With everyone on the lookout for a money-spinner, it is essential to do everything you can to give yourself an edge. Four golden rules will help.

First, look for “price pinch points” where stamp duty thresholds in effect force sellers to lower asking prices. Homes valued at just above £500,000, £1 million and £2 million are slow to sell. Buyers are reluctant to pay the four, five and seven per cent stamp duty that kicks in, and will hold out for a price below these trigger points.

“If a house has been on sale for six months at £1.2 million, for instance, its price will probably have to drop to £950,000,” says Frank Andrews, a relocation agent.

Secondly, house-hunters should keep their eyes peeled for “micro-markets”, where infrastructure developments are set to make areas more desirable.

For example, there are 37 new stations being built along the Crossrail high-speed cross-London train service from Maidenhead in Berkshire to the Thames Estuary. In 2018, when the line opens, these places will become sought-after commuter hot spots. Prices will rise accordingly.

Other large-scale road or rail schemes are planned for 2013 in Torquay, Edinburgh, Kent and Cambridgeshire. Buyers should get in early, before the market has fully adjusted for these improvements.

Desperate times call for increasingly drastic measures from vendors. The third golden rule is to look for special reductions or giveaways. Often these come on top of already low prices. On, you can search from more than 100,000 properties with asking prices slashed by up to 59 per cent. If sellers are truly motivated, they will sometimes accept less than the market rate simply to get the property off their hands.

There is one final rule for house-hunting in a difficult market. If the property you are interested in is similar to others nearby, look for a seller who offers something extra.

Examples of this tactic are everywhere. One estate agent recently sold a London house with a G-Wiz electric car thrown in. A seller in Lincolnshire, meanwhile, is offering a small powerboat with the property. A four-bedroom home in Surfleet, Lincolnshire, also comes with a garden and mooring (£450,000, Chesterton Humberts, 01780 758090;

But with all four golden rules, the key is to strike fast. “Prices won’t stay low forever, and sellers will not remain on the back foot,” adds Frank Andrews. “Until the market reverses, buyers are in the driving seat.”

Source:  Telegraph 8/1/2013