New forecasts released by the Centre for Economics and Business Research are revising house price growth upwards across the UK - with the exception of London.
CEBR says average UK house prices will increase 1.5 per cent in 2015. This is an upward revision from the January forecasts of a 0.6 per cent decline in prices.
CEBR continues to expect London house prices to underperform the rest of the UK this year; prices in the capital are expected to decline by 3.6 per cent. The strength of sterling against the euro, fears of a mansion tax and hefty new stamp duty rates on high value properties have all hit housing demand from overseas buyers.
In 2015, for the first time since 2009, house price growth will be stronger outside the capital than in London itself. Leading indicators such as fewer new buyer enquiries and properties taking longer to sell already point to falling prices in the capital.
Outside of the capital, the decline in overseas interest in UK property will be much less strongly felt. At the same time, most homebuyers have benefited from December's stamp duty changes as well as an improving labour market which has boosted consumer spending power.
Research by CEBR and polling company YouGov suggests that consumer expectations for property price growth across the UK have been picking up in recent months after declining in October - something that is feeding through into rising consumer confidence in the run-up to the general election, says the organisation.
Outside of London, the outlook for house prices this year has improved after a few months when the market appeared to be coming off the boil. December's stamp duty changes, as well as rising household incomes, are lifting prices in many parts of the UK says CEBR economist Nina Skero.
In London, however, we expect prices to decline by 3.6 per cent, driven by a significant weakening at the prime end of the market. A potential mansion tax, reduced overseas interest and hefty new stamp duty rates have hit demand for high value property she says.
Comments
Kelly- Agreed, a good slice of our buyers come from London & the south east, looking to buy their 'country retreat'. If they're slow down there, we're slow up here unfortunately.
Also agree with your yawn, anything Notonthehighstreet comes out with tends to be rather tiresome.
@notonthehighstreet - yawn.
Anyway, back to the story. I don't quite think this is the welcome news the other posters believe it is. If the London market isn't performing, and in particular the Prime Central London market, then the whole country suffers as a result.
I doubt this is much of a trend emerging, though, just a natural reaction to the period of uncertainty that comes before any general election.
No mention of the disastrous revival of the Right to Buy scheme by the Tories in today's news
[quote]A potential mansion tax, reduced overseas interest and hefty new stamp duty rates have hit demand for high value property[/quote]
Not before time!
I think London could benefit from a slowdown, don't you