Who’d have thought, this time a downbeat year ago, that the past 12 months would see the housing market regain its mojo?

And yet, a year on, a recovery is clearly well under way, with building society Nationwide just reporting that house prices across the UK surged by 8.4% over 2013.

While many areas have been healthy price rises, much of the upturn has been put down to London and the South East,

Meanwhile, the number of mortgage approvals made to home buyers lifted to over 70,000 in November, according to Bank of England figures, marking the highest number of loans given the green light since January 2008.

New research out from Halifax also suggests activity will show little sign of slowing down in the coming months.

More than half (51%) of people surveyed by the lender believe 2014 will be a good time to put a property on the market, the highest figure for three years.

The housing market’s recovery has been partly put down to government schemes such as Help to Buy specifically aimed at helping borrowers with small deposits onto, or up, the property ladder.

Another scheme, maybe not as well known, called Funding for Lending has given lenders access to cheap finance on condition that they pass the benefits on to borrowers.

The Funding for Lending has now been refocused away from households and towards helping businesses instead, which could have a calming effect on the market.

Another thing to quieten things down could be when stricter mortgage rules are set to come in this April, under the Mortgage Market Review, to make sure there’s no return to irresponsible lending.

Good times or danger ahead

Christopher Doe, of estate agent Fine & Country, High Street, West Malling, said: “There are many factors that when combined give confidence to the market.

“Buyers may well consider that they should buy this year before prices stretch away from them and sellers may believe that this is their best opportunity, for many years, to bring about the move that they have been yearning for for some time.

“Statistics can be confusing and easily manipulated, however, the stark reality is the country is in its best financial position for some time and although the economy is far from perfect all but a few expect these conditions to hold if not improve further.

“My advice? If you can afford it – go for it!!”

The Royal Institution of Chartered Surveyors expects to see a further house price uplift, fuelled by a continued shortage of homes for buyers to choose from.

It predicts an 8% rise across the year, with all areas of the country seeing increases, ranging from 11% in London to 4% in Northern Ireland. Scotland and Wales are expected to see prices lift by around 7%.

imon Rubinsohn, chief economist at The RICS, says: “Transactions will continue to rebound despite the withdrawal of support for household borrowing through the Funding for Lending scheme. Total sales across the country could reach 1.2m during the coming year.”

But he also believes mortgage costs are likely to edge up towards the end of 2014.

This will contribute towards a gradual slowing in the rate of house price inflation and “a more stable trend in transactions in 2015”, he says.

The Council of Mortgage Lenders believes the housing and mortgage markets look set to continue to see greater activity in 2014 - but it adds that “an unbridled housing boom is unlikely”.

The CML forecasts a rise in gross mortgage lending from an estimated £170 billion in 2013 to £195bn in 2014.

Halifax expects house price rises in 2014 to be broadly similar pace to those seen last year.
Overall, prices nationally are forecast to increase by between 4-8%.

Halifax housing economist Martin Ellis says: “Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence.”

He says that while London has led the recovery, the pattern of increases is set to become “more broadly based” in 2014, with all regions seeing price gains.