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Stagnant homes market in Devon and Cornwall is set for an upturn

By Western Morning News  |  Posted: December 04, 2012

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House prices in the South West could rise by between 10% and 30% in the next four years, industry experts predict, as the decline in the homes market undergoes a significant improvement.

Despite current falls in the value of property, research by BNP Paribas Real Estate suggests a cumulative increase of an incredible 29% by the end of 2016.

Local property expert Richard Copus was much more cautious but suggested a price rise across the region’s property market was certainly possible. However he warned against making too firm predictions, given the volatility of the economy.

Mr Copus, spokesman for the National Association of Estate Agents in Devon, said 10% growth in five years’ time was a more realistic figure.

BNP Paribas said housing in the South West has “performed well” compared to many other areas over the last five years giving cause for optimism for home-owners.

Their forecast comes in the company’s recently published Housing and The Economy report pulled together by Professor Patrick Minford, a former economics adviser to Margaret Thatcher and current Professor of Economics at Cardiff Business School.

He said across Britain the overall long-term picture for house prices was also positive with 24% growth expected between now and 2016 – five percentage points down on the growth expected in the South West.

Nationally the housing market saw a 1.1% drop in growth this year following last year’s marginal fall of -0.2%.

Next year is looking more positive, however, with a forecast growth nationally of 0.9%, said the report’s authors.

Peter White, head of BNP Paribas’ Bristol office said the South West region’s housing market was doing particularly well. “The South West housing market has performed well over the last five years and outside London it is the second best performing region, behind the South East,” he said.

“Over the last five years, South West house prices have fallen -0.1% per annum compared to -0.2% per annum in the UK.

“Looking at the five-year forecast on a year-by-year basis, next year will be a pivotal year for the region’s housing market.”

“After two years of falling house prices, 2013 will mark the return to growth with prices forecast to rise 0.4%.

“House prices will then continue to rise year-on-year until 2016.

“When comparing forecast South West house price growth against other regions across the country, the outlook for the South West can be considered relatively upbeat.”

Other industry insiders agreed a lack of available housing across the region had helped to keep prices relatively stable.

Richard Donnell, director of research at Hometrack which regularly asks 1,500 estate agents and surveyors across the country about achievable selling prices, said the current ease-up in South West prices was not as bad as last year.

He said: “The slowdown in the housing market over the final half of 2012 has been less pronounced than that seen over 2011, despite pressure on household incomes.”

Mr Donnell pointed to recent figures released by the Council of Mortgage Lenders (CML) showing lending has increased, which he said reflected lenders offering more competitive mortgage deals as a result of a multi-billion-pound Government scheme launched in August to kick-start lending.

He said he expected to see a “clearer picture” of the impact of the scheme to develop next year.

However, Mr Copus was sceptical of the cumulative 29% growth, forecast by 2016.

He said: “Nobody can forecast how house prices are going to rise over a five-year period – you may as well look into a crystal ball.

“I agree that in two years’ time we might see an increase of 1% to 2% after prices have stabilised.

“But only a fabulous economic boom would see house prices increase substantially again.”

High demand and a shortage of property is helping to drive up prices

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  • MichaelB77  |  September 07 2013, 10:23PM

    Check out http://tinyurl.com/lchn2b2 – the site gives easy access to house prices in Devonl.

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  • Countrylover  |  December 05 2012, 9:37PM

    One minute they are falling the next rising but as people are having to take fairly big drop to sell them they are definitely falling. We are being flooded with huge estate going up, 450 sticklpath, it seem these wont cause traffic jams apparently, even with the possibility of 900 cars, but a supermarket to be competition to tesco will be, as planning have refused to allow it, although a tesco express has been given approval!!!! Then 750 near Ilfracombe plus another 500, building the start of a new town is NDC/Ilfracmbe councillors and planning "cunning plan" to regenerate Ilfracombe. Leaving the towns shops empty, derelict hotels, empty houses and boarded up plots of landing in Ilfracombe itself seems an unusual way to do it to many. All this cement covering the land is causing flooding to houses near them although the builders will deny this. What is the "affordable" price. Unless is is stipulated that only local people can buy them and any local person selling their house can only do so to another local person the the only ones able to afford the will be 2nd or even 3rd home owners, or buy to let agencies. Then it will all start again the excuse to to build "affordable" homes causing even more floods. We do not need this housing just to appease the planner, councillor builder friends. The councils could convert the office/housing blocks they are wanting to sell into a great many flats instead. They cannot clear drains,do road maintainance etc now so this will get much, much worse.

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  • GMann  |  December 05 2012, 8:30PM

    Greed - setting up for the next recession.

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  • pete13  |  December 05 2012, 3:00PM

    I will make three firm predictions for the future, a horse not a house will win the next Derby, energy prices will rise and house prices will fall !

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  • Charlespk  |  December 05 2012, 2:57PM

    What? . . House prices on the rise again? . . Not until they've finished 'correcting' with the overall level of inflation. . We've got another six years of austerity according to the Chancellor. . Add to that the meteoric rise in energy prices. :(( If they haven't 'inflation indexed' the sale prices of the sales that they have achieved, which seems to me to be the case; they are guilty of one almighty scam. With inflation of say 2 or 3% since 2008, even if sale prices had remained constant since then it would have been a drop in 'real' values of 10%. . Until 'bridging' to move house becomes viable and more the norm again, I can't see much hope of a normal market resuming. . There's no shortage of 'land Banks' with planning permission, there's just a lack of people who will/can afford to buy any houses at the prices they now think they are worth. . Well that's my opinion.

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  • JJLee  |  December 05 2012, 12:42PM

    Fully agree stork, but a pointless endeavour as money is tight and homes are being auctioned missing out these vultures. Big Ger\jj you mean a home not a house, a house is a pile of brinks which are usually formed to resemble a box with the cost normally reflected more by the bit of land they are constructed on rather than size or shape of the box.

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  • Stork  |  December 05 2012, 12:16PM

    Another attempt to " hype up" the property market, by estate agents', who are having the quietest business times of their career. I know people in the current property game, and that's what they tell me. If local wages are low, or at the Nation's average, then the "locals" can only buy properties at relatively low prices, or, get hopelessly in debt trying to achieve their goal. Second home buyers will always be around throughout all of the UK. But usually, they want either a sea view, a nice country view, or a nice small property in the middle of a busy and vibrant city. Much of the South West does not come into any of those categories, and that's where most of the "locals" live and want to live. If "locals" wages remain pretty much where they are for the next five to ten years, then local housing prices will match that. After all, who is going to pay a higher price ? They can't afford to. It may well be that "some" people might want to move out of the big cities like London due to high property prices, but is anybody going to buy a " local" type house in the South West, and commute to London ? Very few I suspect. The majority of the property market will remain static for some considerable time yet.

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  • 2ladybugs  |  December 05 2012, 10:55AM

    Even as a homeowner, I do hope they are wrong. I can't see increases myself, especially if new houses start to get built at reasonable prices. Not only that I can't see them keeping the interest rates low for ever and a day, they have got to rise eventually. People aren't going to over commit themselves until more jobs become available and the economy is settling. I must admit that the houses in my nearby village are selling, but at vastly reduced prices.

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  • Bleach  |  December 05 2012, 10:18AM

    @dkkat50 "again it is the rich and wealthy who set the price in the free market of property" You're so clever, get rich and set them yourself.

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  • Big_Ger  |  December 05 2012, 9:31AM

    "House are functional. They are for living and raising families. They should not be seen as investments." Says by jimjams2011 They are both. They are investments in our family and our futures. You cannot separate the two functions.

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