Hamptons International has revised its forecast for 2015's housing market on the strength of George Osborne's stamp duty changes, suggesting prices in England and Wales will grow by up to four per cent next year and 4.5 per cent the year after.
Over 2015 the east oi England is the region expected to see the greatest rise in prices, at four per cent, along with the south east, south west and north west.
In London, which saw the strongest growth in 2014, house price growth is set to be the most subdued - prices in Greater London are set to rise by 1.5 per cent, by 2 per cent in central London and a meagre 0.5 per cent in Prime Central London in 2015.
Overall transaction growth is expected to be modest over the next two years.
The stamp duty reforms will have two effects, claims Fionnuala Earley, research director at Hamptons International.
First, to give buyers more to spend and second, to make it slightly easier for them to pass affordability tests. Both of these should boost transaction numbers and price growth, but this is likely to be a short term effect as prices adjust, eroding the benefit of the tax cut. The largest effect is likely to be felt in the first half of 2015, mitigating some of the usual slow down we'd expect in the run up to an election she says.
She says that London is going to be subdued, reflecting affordability concerns and the expectation that recent price growth is unsustainable, especially in the face of low wage inflation.
The changes to stamp duty will prove a drag on house prices above £1m as vendors have to adjust their expectations. This will add downward pressure to prices in that bracket predicts Earley.
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