So it has been quite a year for the UK property market, we have seen house prices soar in London and big changes to the way the mortgage market operates. We are heading into 2015 with a healthy market, talk of a property bubble is long gone, and the dated structure of Stamp Duty has been reformed.
On the horizon is the general election, and as housing has been a hot topic on the political agenda, there is a high possibility that the subject will feature on the political campaign trail. It is highly likely that house prices will continue to rise, but at a much slower pace, most experts are predicting around 3%, although there will be considerable regional variations.
This year’s change to Stamp Duty is likely to have a positive effect on the vast majority of property prices across the UK as it is now lower on properties below £937,000, which should help both sales numbers and values.
The Royal Institution of Chartered Surveyors (RICS) believes that the Stamp Duty change will strengthen the market and is predicting a 3% price growth for the year, with all regions of the UK seeing modest price growth.
Within the rental market demand still surpasses supply, according to the Association of Residential Letting Agents (ARLA) which is predicting growth in rental prices of around 2% to 3%.
The most optimistic outlook comes in terms of asking prices, with recent predictions stating they will rise by around 7%. However what must be remembered here is that this prediction is based on a key assumption that there will be no change in interest rates. Even with a small rise in the Bank of England base rate, market sentiment would be severely affected, an interest rate rise of 1% would likely bring down price growth to zero for 2015.
A lot will of course depend on what the Politician’s do and who forms the next government. The current coalition has done a lot for first time buyers with the Help to Buy scheme and the recent Stamp Duty change being hailed as huge triumphs.
One thing for sure is that these incentives won’t last forever. More houses need to be built to meet an ever growing demand, during 2014 there has been tremendous steps forward in terms of loans to developers, and deals being offered. This could be the way forward to an even more successful housing market in the coming year and beyond.