In this 2014/ 2015 Review
- House Prices
- Rental values
- Mortgage market
- Tax & regulatory
Chestertons' review of the 2014 property market and our expectations for 2015. In addition to this we would like to wish all our readers a Happy New Year!
House Prices in 2014
- Average national house price growth rose throughout the year before peaking in August at 8.3% but should still end the year around 6%-7% higher than at the end of 2013.
- The wider London market went from strength to strength as the year progressed although autumn heralded the beginning of a slowdown. This was relative, however, as average prices still rose by 17.4% in the calendar year to November and should record double digit growth for the year as a whole even allowing for the usual seasonal dip in December.
- The Prime London market galloped away in the first quarter only to stall during Q2, and subsequently experienced a downturn in both transaction numbers and prices in the latter half of the year.
House Prices in 2015
- After a strong 2014, national house price growth will moderate in 2015 although underlying conditions are sufficiently robust to suggest that a crash is highly unlikely. External downside risk notwithstanding, we forecast average prices will rise by 5.5% over the year.
- In London, the imbalance between supply and demand suggests house prices will continue to rise in 2015. However, we do not believe the current rate of price growth is sustainable and the tighter mortgage environment will also act as a brake on prices which we forecast will slow to 6.5% next year.
- The prime market direction, less reliant on mortgages, will be determined over the coming year principally by tax issues (Mansion Tax and the new SDLT rates), the attitude of foreign buyers and sellers and investor confidence.
- Prime values are likely to flatten up until the election after which if the Conservatives win, we expect average prime values to settle back into growth mode with growth of 3.5% over the year. However, the market could remain subdued for some time under a Labour or Labour-led coalition administration.