What Does this Mean for 2015?
It is fair to say that over the last 12 months the UK housing markets had seen some of the most frenetic and in some cases unprecedented, levels of growth in house prices since the financial crisis of 2007/08. London and the South-East in particular saw some of the most significant increases, while smaller, but still important growth was seen in the majority of the nation’s counties.
The rising prices were welcomed by many but still had led forecasters to predict an eventual nationwide slowdown. During the last four months of the year up to December it appears these predictions were accurate as growth continued to slow, with the final month of the year seeing the slowest rates overall. The increase in December was only 0.2%, affecting all but one of the UK’s property regions.
What Does this Mean for the Markets?
While it might be disappointing to end the year on a low point, it is not necessarily all bad news for the markets. Despite the slowdown the average house price is still at a healthy £188,559 and, as a further positive, the UK has still seen price increases across the whole year.
This, combined with the current low levels of mortgage rates, and the continuing decline in unemployment, means that many experts are predicting this cooling to eventually pick up again in 2015. On top of this the Government’s reforms on stamp duty, as well as the continued stricter rules on mortgage lending, has meant the forecasts for growth are more reserved and ultimately more balanced than the levels seen in 2014.
A Continued North/South Divide?
It is believed the supposed ‘North/South divide’ with price rises is set to continue next year however. This stems in part from the significantly high prices seen in the capital and its surrounding areas. The average house price in London for December 2014 was at a record high of £406,730, which has meant many working in the capital have sought homes in nearby commuter towns, which in turn has driven up their regional prices.
With no sign of this popularity decreasing, some of the Northern areas such as the North West and Yorkshire and Humberside are unfortunately expected to see a continuation in their current lower levels of growth – with their respective annual rises reported as being 3.8% and 1.5% respectively. Whether or not this will improve as the country’s overall economic situation changes, remains to be seen.