I think the property market will be steady this year it seems that Mortgage approvals are up and the government schemes are giving the market a boost, it will be interesting to see how long they keep this up there is only so much they can put into this, and it will be interesting to see what happens when they stop the help to buy.

The other thing that will be good to keep an eye on is average earnings. the average earnings should be about 3 time the cost of the average house, but I have a feeling this has got a bit out of line. in the late eighties and early nineties the average earnings did not go up in line with house prices, and as a result when the average house price got to about 4.5 times earnings,  we had a major correction in house prices. this time we are already way past this level, it has not had such a big impact as interest rates are historically low so this makes things more affordable, so what happens if interest rates go up, as there is only one way for them to go.

I hope the people at the Bank of England are keeping a close eye on this as it could end up getting quite expensive to own a house that you have stretched yourself to buy on current interest rates,  only to find the only way of slowing the housing market down is by increasing rates. people who can’t afford it will put their property on the market, then you get over supply and then the rush to sell starts and prices start to drop.

I think it is a good time to fix rates with your lender and at least you know that you can maintain the mortgage payments when the time comes when interest rates go back normal.

Richard Butler-Creagh