Prepare for house prices to FALL, warn the experts: Leading forecaster predicts drop of 0.6% during 2015 - compared with an 8.8% rise over past 12 months
12-30-2014
- After a year of soaring house prices across Britain, they are set to fall
- Warning comes from the Centre for Economics and Business Research
- Group will warn prices will slip during 2015 - conflicting with other analysts
- It predicts London house prices will fall by around 8 per cent in 12 months
By Peter Campbell for the Daily Mail
House prices across Britain will fall in 2015 after a year in which they soared, a leading independent forecaster warns.
The Centre for Economics and Business Research (CEBR) is poised to break ranks with estate agents and forecasting agencies in its assessment for the New Year.
The group will next month warn prices will slip by 0.6 per cent during 2015 – compared with an expected rise of 8.8 per cent in the past 12 months.
The Centre for Economics and Business Research will warn house prices will slip by 0.6 per cent during 2015
It puts the forecaster – which has one of the best records when it comes to predicting the housing market – at odds with other analysts, including the Treasury’s own independent forecasting unit, the Office for Budget Responsibility.
The OBR has said it expects prices to rise by a further 7.4 per cent during 2015.
In London, house prices are set to fall by around 8 per cent in just 12 months, the CEBR will say.
Changes to stamp duty will see anyone buying a home worth less than £937,500 pay less than under the old system. But because of the number of expensive homes in the capital, prices are likely to be hit.
By October 2015 the average London house price will have fallen by around 8 per cent compared with this year, the CEBR will say.
Prices in the capital have risen by almost 20 per cent in just 12 months, the ONS said in October. The average property is now worth £514,000.
CEBR executive chairman Doug McWilliams said: ‘London is an unusual market driven primarily by the top end, and though the majority of Londoners will benefit from [the stamp duty reforms], it is going to mean that overall prices will be lower not higher.
‘Despite the drop it does still mean that London prices will be around 6 per cent higher than two years ago because they went up then down.’
Overall, new rules over mortgage lending and a glut of sellers have stemmed the rise of house prices.
Other evidence also points to a dip. Property website Zoopla has said one third of all UK properties on sale today have seen their asking price lowered at least once since coming on to the market.
By October 2015 the average London house price will have fallen by around 8 per cent compared with this year, the CEBR will say
'No one's expecting house prices to drop dramatically again'
Mortgage approvals also fell for the fifth consecutive month in November, according to the British Bankers’ Association, largely because of the rules introduced in April that applied stringent tests to applicants.
The Chancellor’s reforms to stamp duty will also not be sufficient to support a continued climbing of house prices, the CEBR will say in its quarterly update next month.
Its economist Nina Skero said: ‘While the reformed system of stamp duty is expected to boost transaction activity in nearly all regions, this alone is unlikely to entirely offset other factors weighing on the market.’
The price of the average UK home was £271,000 in October, according to the Office for National Statistics, up from £252,000 at the start of the year – a rise of 7.5 per cent in ten months.
The CEBR has already said Britain’s housing market will hit a ‘turning point’ in the new year. It said many homes were taking longer than expected to sell as prospective buyers ‘baulked’ at rising price tags.