House prices to rise 4pc in 2015
House prices will grow by 4% in 2015 and 4.5% in 2016 across England & Wales, estate agents Hamptons International has forecast.
Hamptons predicts the recent changes to Stamp Duty will boost prices and transactions in the first half of 2015 in all but the most expensive housing markets.
Over 2015 the East is the region expected to see the greatest rise in prices, at 4%, along with the South East, South West and North West.
In London, which saw the strongest growth in 2014, house price growth is set to be the most subdued.
Prices in Greater London are set to rise by 1.5%, by 2% in Central London and 0.5% in Prime Central London in 2015.
Fionnuala Earley, research director at Hamptons International, said: "The Stamp Duty reforms will have two effects.
"First to give buyers more to spend and second to make it slightly easier for them to pass affordability tests.
"Both of these should boost transaction numbers and price growth, but this is likely to be a short term effect as prices adjust, eroding the benefit of the tax cut.
"The largest effect is likely to be felt in the first half of 2015, mitigating some of the usual slow down we'd expect in the run up to an election.
"For those buyers faced with a higher Stamp Duty bill, 60% of which will be in London, on average, the difference is equivalent to about 2% of the purchase price.
"London markets are expected to remain subdued in 2015, with price growth staying broadly flat.
This reflects ongoing affordability concerns and expectation that recent price growth is unsustainable, especially in the face of low wage inflation."
But Earley expects growth to remain modest and said: "Overall we expect house price and transaction growth to be modest over the next two years, but there are risks.
"On the upside a boost in sentiment from the Stamp Duty reforms overriding the usual slowdown ahead of a general election, coupled with stronger economic growth, could see transaction growth of 5% to 8% next year.
"On the downside, continued sluggish wage growth, uncertainties surrounding the election negating a positive shift in sentiment from Stamp Duty and a sooner than expected interest rate rise could all weigh on expectation leading to no transaction growth in 2015."