Wider UK property market to outshine London this year

on Apr 14, 2015
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The wider UK property market is poised to outperform that of London this year for the first time since 2009, according to research conducted by the Centre for Economics and Business Research (CEBR). It’s true that London has had one of the world’s best performing property markets since the 2007/08 mortgage crisis, however, property prices are expected to fall by 3.6 percent in the capital this year, while the overall UK property market is expected to see a 1.5 percent rise.

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The predicted fall in London’s property prices is not expected to last for a long time and by the beginning of 2016, values should have increased on average by 2.7 percent in the capital while the rest of the country will gain a 2.3 percent rise.
There are a few different factors affecting the London property market at the moment, many of which can be attributed to the uncertainty of the outcome of the general election in May. However, according to CEBR economist and author of the research, Nina Skero prices in London are expected to decline mainly due to “potential mansion tax, reduced overseas interest and hefty new stamp duty rates”, which have hit demand for high value property in the capital.
The UK residential property market saw somewhat of a recovery last year, with house prices in London rising by 17.4 percent and overall UK property prices increasing by 10 percent. However, by the end of 2014, prices started to even out across the country. An increased level of caution spread to the market once more as stringent lending policies were introduced. Would-be overseas buyers interested in flash London residences have been put off by concerns over a Labour-led government introducing a mansion tax, also the strength of the pound against the euro and December’s stamp duty changes have all had their own impact on transaction levels for now.
The changes to stamp duty can also take partial credit for the increase in residential property prices outside London, as more people scramble to take advantage of low interest rates by searching for more affordable properties than the capital has to offer.

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