How will the UK property market fare in 2012?

Despite predictions that home values would drop dramatically in the aftermath of the credit crunch, prices have so far stubbornly refused to fall. In many areas of the country they remain close to their all-time high, and in some areas of London have actually grown over the past two years.

According to experts, however, 2012 will be a different matter. Knight Frank predicts that the market will experience an extended period of low transaction numbers and price falls in real terms, resulting in a 5% price drop across the country – regionally, that’s a 6.7% fall in Wales and a 4.1% fall in the south east. Even London will feel the pinch, with a 3.7% overall fall in property prices.

However, as many economists are pointing out, price prediction in the housing market is an uncertain business. While low interest rates may mean that house prices remain flat or dip slightly, the long-term trend is still viewed optimistically by many. One of the main factors in the equation will be the availability of mortgage finance during 2012. Lenders have certain become more cautious in the wake of the credit crunch, but banks are still prepared to lend to individuals with good credit records – and low interest rates mean that there are some fantastic deals to be had.

If you’re considering buying a house this year, then the first step is to work out approximately how much you can borrow by using an online calculator such as the Santander calculator for mortgage assessment. This will help you to establish how your earnings and the deposit you are able to put down will impact on how much you can borrow.

If the amount you are able to borrow appears less than ideal, then don’t panic. A mortgage calculator may not take into account individual factors such as your credit rating and whether you have other property that you can borrow against. It’s therefore a good idea to talk to a mortgage advisor in person to discuss your own circumstances.

The benefit of the calculator is that it can give you a ball-park figure that will enable you to estimate what sort of property you might be able to afford. You can up that amount by saving for a larger deposit or by reducing your other financial commitments. However, you should always make sure that you can afford the repayments before taking out a mortgage.