23 Oct

Property prices expected to continue to rise

Property prices expected to continue to rise

The latest figures suggest that property prices in the UK could rise by nine per cent by the end of 2014 and by a further five per cent next year.

Data from Strutt & Parker shows there will be strong growth over the next two years, despite the forthcoming general election and a potential cooling down of the market.

Experts are also highlighting how a rise in the base rate of interest and the potential impact of the Mortgage Market Review (MMR) changes may still lead to uncertainty for both buyers and sellers, but prices could remain firm.

"Agents are reporting a continued slowdown in some areas as buyers and sellers nervously await news on the upcoming general election and the potential for a mansion tax. As is often the case in uncertain times, it may also be that transaction levels will decrease in the run up to May 2015, but values could hold up better than expected," said Stephanie McMahon, head of research at Strutt & Parker.

She added: "Above and beyond the general election there are a number of other potential headwinds slowing the property market, including talk of interest rate changes and the MMR and the slowdown it is causing."

It is expected that growth in the central London market will start to ease, with the forecast being for a three per cent increase in prices in 2014 and two per cent in 2015 - compared to an annual growth of 13 per cent seen in 2010 and 2011.

There has also been a rise in the number of people who feel there is a lack of affordable houses available on the market.

Research from Gocompare.com Mortgages has concluded the gap between supply and demand for properties is impacting on attitudes towards home ownership

A study conducted by the company found that 26 per cent of people looking to buy a home feel  the UK is becoming a two-tier society, divided by property owners and those who have not stepped on to the housing ladder.

More than 20 per cent feel they will only be able to afford a home if they purchase with the help of someone else, while 12 per cent claim they are disappointed they can't afford to buy in the area they grew up and ten per cent feel they will only become property owners if they are left a house in a will.

"It's easy to see why people feel so frustrated with the UK’s housing market. Not only are there not enough houses being built, but people face having to move away from their friends, families and home towns if they want to buy a home of their own," said Matt Sanders, spokesperson for Gocompare.com Mortgages.

He added that the government much must continue to look at how to ensure there is the correct level of housing sector properties available and that people are adequately supported when trying to become homeowners.
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