The figures from a report by the Royal Institution of Chartered Surveyors (RICS) have revealed that the rise in UK house prices is at its slowest rate since May 2013, and that the number of house buyers dropped for the sixth month in a row up to December.
London was highlighted in their findings due to the fact it was the only location where surveyors showed there were more house prices falling than rising. Nationally however, the findings were much more varied, with the North-West of England seeing strong growth, as well as other positive reports in Scotland and Northern Ireland. Although, according to RICS, an increase of 10% of surveyors across the country saw a drop in the amount of new home buyers.
Simon Rubinsohn, the RICS Chief Economist, suggested that these falls stemmed from the effects on the public - from both the changes to mortgage lending from April’s mortgage review and the upcoming potential governmental changes in May. This suggests that many people are more cautious about making a purchase, as more stringent lending criteria has made it hard to access mortgage finance.
Stamp Duty Reforms
RICS also offered a more positive outlook for the future of prices in 2015 though, regarding the potential effects of Chancellor George Osborne’s stamp duty reforms. These tax changes promised that 98% of England and Wales’ homeowners would pay less under the new system, with only buyers of properties costing over £937,000 paying more. The expectation by RICS is that this will lead to an eventual rise, in house prices and activity in house buying, of 2-5% across much of the country in 2015.
Increased Rental Demand
Mr Rubinsohn also suggested how the almost ‘historic lows’, in the amount of property the UK has available, could lead to higher house prices through the increased demand. At the same time, this demand could spell good news for the rental markets as ‘demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country.’
Whether these increases occur over the coming year remains to be seen, what is more certain though is that 2015 already promises to be an interesting year in the UK housing markets.
*all data correct as of 15/01/2015
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