Asking prices set to rise by 7% in 2015
Home.co.uk predicts the South East and East of England will be among the biggest winners over the next 12 months.
The property market in England and Wales is set for continued growth in 2015, with asking prices likely to rise by around 7%.
Record low mortgages will continue to stoke demand as will continued interest in buy-to-let as an investment choice despite falling yields caused by rising prices and a squeeze on lower earners’ real incomes.
The only region that will see lower asking price growth across England and Wales compared to 2014 is Greater London. A chief cause is a rapid rise in housing supply, with a 39% increase already recorded in the capital since 2013.
Home.co.uk is predicting a rise of 10% in asking prices in Greater London over 2015, down on 2014’s dramatic rise of 15.9%.
The largest increases in asking prices are set to be seen in the East and South East of England. A rise of 11% is predicted for the East of England, up on 2014’s rise of 9%, while in the South East, an annual rise of 10.5% is anticipated, up 2.2% on 2014’s rise. A key factor in the optimistic predictions for these regions is their historically low supply of property, which is likely to offset any rise in stock throughout the year.
The North of England property markets, which have been beset with unemployment and financial pressures caused by austerity measures, look set to improve, albeit slowly.
A rise of 2.8% is predicted for the North West property market in 2015, marginally up on 2014’s rise of just 2%. In the North East, a rise of 1.8% is predicted, double 2014’s asking price increase of 0.9%, and in Yorkshire and the Humber, a rise of 3.5% is anticipated, up on 2014’s annual change of 1.8%.
Improvements will be more pronounced in the East Midlands, where growth of 7.5% is predicted. This is 2.5% up on the region’s 2014 increase.
The West Midlands looks set to be another winner, with an increase of 5% predicted for 2015, up on 2014’s rise of 3.5%. Wales’s growth is predicted to be 2.5%, up on 2014’s rise of 1.5%, and in the South West, a rise of 5.5% is anticipated. This also compares well with the previous year when the annual change for the South West was 4.2%.
It should be noted that the above predictions are based on a key assumption: no change in interest rates. Should there be even a small rise in the Bank of England base rate, market sentiment would be severely dampened. A more dramatic interest rate hike of 1% would likely bring down price growth to zero for 2015.
Home.co.uk director, Doug Shephard, commented: “2014 has been a strong year for UK property butâ€¨not all regions prospered the same. 2015 looks likely to be a year of more even growth across the country.
“East Anglia and the South East look set to be the leading regional markets next year owing to their much improved marketing times. Supply of property for sale remains historically low in these regions and this will keep prices on an upward trajectory, although we do anticipate market volume to steadily increase over the course of 2015.
“The East Midlands also looks primed for a good year ahead; we expect above average price growth and lower marketing times in 2015.
“Looking further afield, the North of England property market, hampered by employment problems and austerity measures, will continue to improve slowly, as will Wales.
“Across in the South West andâ€¨West Midlands, further market improvements are to be expected, but growth there is likely to be slightly lower than the national average.”